There is a lot more room for equities to run, even if earnings don't live up to the market's recent rally, trader Steve Grasso told CNBC on Tuesday.
That's because people rushed into bonds and safe haven assets during the Obama administration, and they've been "so underweight" in financials and energy, he said in an interview with CNBC's "Closing Bell."
Now that a new administration is moving into Washington, they're unwinding that trade, the director of institutional sales at Stuart Frankel said. "You cannot tell me that they've unwound it in a month."
Therefore, he believes there is a "tremendous runway for stocks to move higher."
Other investors have been cautioning about the "euphoria" in the market since Donald Trump won the election. On Tuesday, former Clinton Treasury Secretary Larry Summers told CNBC's "Squawk Box" he believes the market rally since Election Day is a "sugar high."
However, while investor sentiment in surveys may show a little "froth," that isn't matched by the behavioral measures, like mutual fund flows and exchange-traded-fund flows, said Liz Ann Sonders, chief investment strategist at Charles Schwab.
"So there's still a lot of runway in terms of the behavior of investors. I think that shift back toward interest in U.S. equities is new and still young enough that we probably have a ways to go," she told "Closing Bell."