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Natixis: Go ahead, invest, but don't take a victory lap just yet

Traders on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders on the floor of the New York Stock Exchange.

Stocks rally for a second day, as the Dow Jones Industrial average rebounded more than 300 points Thursday.

With the huge recovery yesterday and today, S&P 500 companies have gained more than $1 trillion in market cap in essentially fewer than two trading sessions. Contrast that to the S&P 500 losses of $900 billion in market cap earlier in the week

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David Lafferty, chief market strategist at Natixis Global Asset Management, which has nearly one trillion dollars in assets under management, told CNBC's "Power Lunch" Thursday while this is not time to take a victory lap, he is urging investors to get off the sidelines.

"By no means is today's action the start of a runaway bull market, but the fear has certainly come out of the market and that makes us relatively optimistic."

Lafferty's favorite sector pick is financials, with an emphasis on large cap global and U.S. banks.

"Valuation has really been pressured in this sector. The big money center banks have been trading at just over 10x earnings. In the long run maybe that ought to be 12 or 13, closer to a market multiple. So we think banks are pretty cheap."

If investors have the stomach for higher volatility levels, Lafferty suggests a move into the emerging markets.

Read MoreEmerging markets not all that bad

"We're starting to see a lot better values in the emerging markets. But we still have a real wild card with the Fed, in terms how quickly they're going to raise rates, and will that means to additional capital outflows across emerging markets. So if you want to bottom fish, emerging markets are starting to get interesting."

But remember to buckle up your portfolio before taking it out for a spin.

"The real open question is how long do you have to leave your money in emerging markets, and how much pain will you have to take before that improved valuation is realized in your portfolio," said Lafferty.