Investors could see recent market winners like financial stocks correct themselves within the next year, but that doesn't mean banks should be exiled from their portfolios, trading expert David Seaburg told CNBC on Tuesday.
"Bank of America, JPMorgan, these are names that are going to work, and they're going to work long term. Are we going to have slight near-term pullbacks? Absolutely. But longer term, you could see these names double within the next several years," he told "Squawk Alley."
Seaburg, a managing director and head of sales trading at Cowen and Co., said that investors will be better served by putting a lid on their fears and buying into sectors that are working.
"The fear here is not to be involved if the market keeps [going] to the upside, and the fear is also to buy the top when things come crashing down and your performance is shot for the year," Seaburg said.
"There's a lot of trepidation here to come and pay up for a lot of these names that have had such enormous runs, but I think you stick with the ones that are working here," he said, citing bank stocks as one example.
But the momentum in the markets is contingent on companies earnings reports and guidance being in line with analysts' expectations, Seaburg said.
"If [they're] not, we could see a big sell-off midyear. But I think we've got momentum here that could last for a very significant period of time," he said.
After the second quarter of 2017, Seaburg said there will be much more clarity on how long investors' positions in bank stocks should truly be. But for now, Seaburg has a few clear favorites.
"So what would I buy? [I] love the regional banks. I love the financials, the big banks in particular," he said.
"For a value trade, I think that you could start to look at some of the larger-cap and mid-cap biotech names," he added, referring to biotechnology companies with outstanding share values of more than $2 billion.