There will be a few challenging years ahead for the U.S. stock market, one investment expert told CNBC on Friday.
While the three major indexes have been hitting fresh highs since President-elect Donald Trump's victory in November, Russell Investments chief investment officer Jeff Hussey is predicting the will end 2017 at 2,100, about 8 percent lower than its current level.
One reason is the market's steep valuation, including high price-to-earnings ratios, he said in an interview with CNBC's "Power Lunch."
Plus, profit margins are very high and they tend to revert, Hussey added.
"We think that those will be impacted both by wage growth that we're seeing and by interest rates rising," he said. "A lot of financial engineering has led to high earnings per share because people bought back their shares with debt issuance."
On top of that, the "huge wall of money" is no longer coming from the Federal Reserve, and that will be a challenge to the economy, Hussey added.
However, Anthony Roth, chief investment officer at Wilmington Trust, thinks the normalization of Fed policy is "very positive" for the economy and markets.
Plus, he likes the reflation story right now.
"We see inflation on the margin increasing. We see consumer sentiment quite strong. We see retail sales quite strong. That's all without additional stimulus from the new administration," he told "Power Lunch."
Add in that fiscal stimulus and Roth sees gross domestic product in the mid-3 percent range for 2017 as a whole.
"As long as we have a dollar that's moving sideways and not hurting exports, which is our base case scenario right now, we see a really good opportunity for equities," he noted.