US Markets

Market could rally 10 percent: Strategist

Closing Bell Exchange: The move around in transports

For more than six years, U.S. stocks have been in a bull market, and investment strategist Price Headley thinks there's more room to run.

In fact, Headley said he's predicting another 10 percent gain in "very short order basically once some of this rotational correction is done."

"Where else do you put your money in this market?" the founder and president of said Tuesday in an interview with CNBC's "Closing Bell."

"I think it's a real sweet spot for stocks."

In fact, he thinks the bull market could charge forward another seven or eight years. He also called the rotation from one sector to another "healthy."

Traders work on the floor of the New York Stock Exchange.
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As for those who are worried about the "Dow Theory," which essentially proposes that transportation stocks indicate where the market goes overall, Headley said the airline and railroad stocks were going down for their own reasons. He also noted that the transports didn't lead the way during the market crashes of 1987 and 2008.

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Erik Ristuben, chief investment strategist at Russell Investments, also isn't concerned. He believes the economic data will continue to improve, which should lift both the transports and the broader market.

The market is "expensive and I think it's going to remain expensive and get more expensive in the future. Our view is that the cycle is very supportive for equities so buy on the dips is a good idea," he said, also on "Closing Bell."

While Ristuben prefers Europe over the U.S., he thinks the U.S. will have good returns at the end of the year. He likes financials, health care and consumer discretionary stocks.

Headley also favors financials as well as the oil refiners.

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Meanwhile, bond investors need to prepare themselves for a very challenging environment, HighTower managing director Greg Sarian said on the program.

That's because he expects the Federal Reserve to begin hiking interest rates in the fall, especially after the recent jobs report and high auto sales numbers.

"Investors in bonds right now should be prepared to look at quality in their portfolio and shortening up their duration," Sarian said.

When it comes to equities, he thinks U.S. investors should add more international investments to their portfolios.

"[The] U.S. has been the right place to be the last two years but I think this change in interest rates is going to be a sea change in the direction of global markets," Sarian said, noting that the lowering of rates in Asia and Europe will drive their markets higher.