One of Wall Street's most closely followed strategists has a message for investors: Stop worrying!
"We're going to break through and head up to new highs," said Jim Paulsen on CNBC's "Futures Now" on Thursday when discussing why the S&P 500 will hit 2,200. Paulsen noted that the constant fears over the economic slowdown in China, the oversupply of oil and even concerns over who the next president will be are clouding the marketplace and creating unnecessary jitters on Wall Street. "Climbing a wall of worry is back and is likely to push us up into new highs and generate a little optimistic excitement again." Paulsen's 2,200 price target on the S&P 500 represents a more than 6 percent rise from where the large-cap index is currently trading around 2,064.
The chief investment strategist for Wells Capital Management said that strong employment and wage growth, the ending of a grim earnings season and reduced deflationary fears worldwide thanks to rising oil prices make him adamant that the best is yet to come for stocks. However, he did say the Fed's dovish approach could be the one thing that could potentially derail growth in 2016.
"They're keeping us as the start line of their tightening cycle," Paulsen said when discussing the Fed's delay since raising rates for the first time in seven years back in December of 2015. "It's like pulling a Band-Aid off a little bit at a time, rather than just ripping it off and letting the markets adjust."
Paulsen concluded that the Fed can always reference a global issue as reasoning for not raising rates, but that the central bank needs to avoid keeping the U.S. economy in limbo.
"I'm amazed they've stayed as long as they have with this policy," said Paulsen. "They continue to come up with reasons not to raise rates. A 'Brexit' being the most recent one."
Nonetheless, Paulsen is confident that stocks will continue to rise and break out of the tight range we've been in for the last year.