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Tom Lee: Investor ‘short-termism’ may make them too optimistic about Trump

Tom Lee: Focus on these big trends...

Investors may be getting too optimistic about President-elect Donald Trump's short-term effects on the market and should instead focus on the long-term implications of his policies, perennial bull Tom Lee told CNBC on Wednesday.

The market has been rallying since Trump became president-elect, with all of the major indexes reaching record highs on Tuesday.

But when asked on "Squawk Box" about potential buying opportunities coming out of upcoming elections in Europe, the co-founder of Fundstrat Global Advisors shot back.

"That's the 'short-termism' that really bothers me about investing," Lee said. "I think investors need to be thinking about the bigger stories like inflation, earnings trends."

Lee said investors who focus on opportunities from politics tend to get caught up in the aftermaths, losing sight of larger trends.

"Political events are important, but they've proven to just be buying opportunities, and I think the mistake everyone makes is they try to be positioned into the event and then they're chasing the market," he said.

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Lee acknowledged that there are reasons for investors to be optimistic, with record inflows coming into the market on the bet that Trump will loosen corporate regulations in contrast to the past eight years.

But it would be wise "to think about what could go wrong," Lee said, noting that over $1 trillion has been lost in the bond market already due to the market rotation into equities.

"Things like corporate tax reform — investors just historically don't pay for that. So even though we think that's going to help corporate profits, it's not something that actually is going to help the stock market on a [private equity] basis," Lee said.

Market fundamentals driving rally, not election: Pro

Appearing in the interview with Lee, strategist Joe Zidle remained optimistic, noting a worldwide recovery in portions of the global market.

"Now that the election's behind us, I think people are taking stock of the fundamentals, and they're realizing that there has been this improvement," said Zidle, a portfolio strategist at Richard Bernstein Advisors.

"It's not just limited to the United States but we're seeing it globally, where we've seen earnings recovering in places like emerging markets, we've seen inflation expectations picking up in Europe and even in Japan," he said.

Zidle said that meant equities are the place to invest and that they will do well for the rest of the year, as money flows into the market from the sidelines, bonds and elsewhere.

"I think people are finally realizing, 'Well, there's something going on here and we want to be a part of it,'" he said.