Unloved Europe is the perfect place for investors shying away from pricey U.S. stocks, as the market has cheapened and the European Central Bank (ECB) is expanding its stimulus measures, according to Wells Capital Management chief investment strategist Jim Paulsen.
As the Federal Reserve begins to tighten policy, the ECB is making it more accommodative, Paulsen told CNBC, who has predicted euro zone equities will outperform their U.S. counterparts in the next 12 months.
Read MoreOECD cuts US growth forecast, warns on risk assets
"I love the fact that Draghi and the policy officials are going to get more aggressive with stimulus at a time that we have just cheapened those markets. I think growth in this region – which has fallen to about 1 percent is going to accelerate to 2 percent," he said.
"I really think the euro itself against the dollar is going to recover somewhat, so the strong theme that the U.S. is the place to be and the dollar is the place to be – I think is overblown a bit. We may find out that Europe is the opportunity," he said speaking from Paris, as the firm opens its first office in continental Europe.
On Monday, the OECD cut its 2015 growth forecast for the U.S. from 3.5 percent to 3.1 percent as the research group warned risk assets currently look "mispriced".
The anticipated tapering of U.S. monetary policy could lead to shifts in international financial flows and sharp exchange rate movements, the group said, highlighting the possibility of a "sudden correction" in stocks.
Read MoreGoldman Sachs gets bullish again on stocks
This comes as investment bank Goldman Sachs announced it had upgraded equities to overweight last week over three months, up from the bank's July guidance which advised investors to be "neutral" on stocks.
The bank is bullish on both European and U.S. stocks, with Goldman's David Kostin, the chief U.S. equity strategist giving the S&P 500 a 2,050 point year-end target.
Read MoreWhy Thomas Lee is bullish on stocks
Stock market strategist Thomas Lee, who recently served as chief equity strategist at JPMorgan before leaving to set up his own equity research firm, Fundstrat Global Advisors, is even more positive on U.S. stocks, with a target of 2,100 for the S&P 500 this year.
U.S. earnings are still below the average increase at a bull market peak, Lee said, who also expects an increase in business investment.
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