With the market near record highs, here's how two pros are investing

  • U.S. equities traded mixed on Monday, holding near record levels.
  • JPMorgan Private Bank's Steven Rees and Neuberger Berman's Erik Knutzen have different ideas about how to invest in this environment.
  • Rees likes tech and energy, while Knutzen is rotating into U.S. small caps and European equities.

With the U.S. stock market trading near record levels, two experts had different ideas about how to best invest their money.

JPMorgan Private Bank's Steven Rees, who is the firm's global head of equity strategy, still likes technology. He believes the more than 20 percent rally this year is "more than justified."

The tech-heavy Nasdaq composite traded 0.1 percent lower on Monday afternoon after reaching an all-time intraday high earlier in the session.

"If you look at it relative to the growth that it offers on a P/E to growth perspective, it actually trades at a discount to the market," Rees said in an interview with "Power Lunch."

"So we're not concerned about valuations. We're very happy with the earnings trends that we've seen across the sector."

That doesn't mean he'd buy everything. Instead, he would be more selective.

For Erik Knutzen, multi-asset chief investment officer at Neuberger Berman, the run-up in tech is "a little overdone."

"We would rather move to where we can take advantage of a global economic growth upturn with some better valuations," he told "Power Lunch."

He's trimming exposure to U.S. large cap stocks and shifting allocations to U.S. small caps and European equities.

He also likes dividend stocks, especially as interest rates rise and volatility increases.

"Stocks that pay you a higher percentage of their return in dividends, where you generate higher income, allows you to reinvest at better levels and at higher interest rates," Knutzen explained.

One sector that has been hit this year is energy, thanks to concern about oil prices. However, that is another area where Rees would buy selective stocks on the pullback.

"Our view is that oil prices remain in a range, and I think if that happens you could still see very good profits for some of the companies, particularly E&Ps with low cost of production, that the market right now is just totally discounting," he noted.

Oil prices fell on Monday after top crude exporter Saudi Arabia and other Arab states cut ties with Qatar, raising concerns about a global deal to reduce oil production.

—CNBC'S Fred Imbert and Reuters contributed to this report.

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