Portfolio Investors should rotate out of "overvalued" U.S. equities next year as the effects of full employment begin to take their toll on the country's economy, according to Jim Paulsen, chief investment strategist at Wells Fargo Asset Management.
"The United States is a crowded trade, it's over-owned in the world relative to international markets," he told CNBC Tuesday.
"I would be mainly weighted in equities away from the United States. Because, I think the United States is in a unique position in the world, almost, in the sense that it's reached full employment, it's going to face some full employment pressures like wage and price pressures."
Paulsen's - speaking to CNBC ahead of presenting his 2016 outlook to clients in London - iterated that investors don't need to "entirely" revert away from U.S. stocks but should instead hold a majority of foreign assets.