More market turbulence ahead: Jim Paulsen

The U.S. stock market has been enjoying recent highs, but Wells Capital Management's Jim Paulsen thinks there will be rocky times ahead.

"While I'm still a longer-term bull ... I just think that nearer term we are headed for a little more turbulence again," Paulsen told CNBC's "Street Signs."

In fact, he said the S&P 500 dropping to 1,800 is "a very likely prospect as we head into 2015" before it heads higher again.

Paulsen pointed to three things that bother him.

First, there has been a 50 percent increase in the stock market's price-earnings multiple.

Read MoreWhat matters for markets next year: Goldman

Traders work on the floor of the New York Stock Exchange, Nov. 18, 2014.
Lucas Jackson | Reuters
Traders work on the floor of the New York Stock Exchange, Nov. 18, 2014.

Also, investor sentiment is more calm and confident than any other time in the recovery and "thereby subject to some unrest if something odd happens."

On top of that, the Federal Reserve is expected to raise interest rates next year, which he thinks will be a big challenge for the market.

In fact, while Wall Street is betting on the U.S. markets, a stronger dollar and lower interest rates for longer, Paulson isn't.

Read MoreBuckle up! Markets in for bumpier ride: Bob Doll

That's why he likes international markets right now, which are underperforming the U.S. market. Plus, he said, policy officials are working hard to prop up those markets with economic stimulus.

In addition, if the Fed waits to long to raise rates and has to tighten under panicked conditions, he thinks that will bring a sell to the dollar.

"I would move away from the U.S., I'd bet on a weaker dollar, and I think you're going to find out that the Federal Reserve, once they do begin raising rates, are going to have to raise them more aggressively than people currently think," Paulsen said.