The nearly decadelong bull market in the U.S. is long in the tooth, and there are better gains to be had elsewhere, according to one strategist.
"We have long thought the market has gotten ahead of itself, with U.S. valuations creating a headwind for continued market growth," Mark Eibel of Russell Investments said Tuesday on CNBC's "Futures Now."
The Dow, S&P 500 and Russell 2000 hit record highs this week as investors put the congressional testimony of former FBI Director James Comey and Attorney General Jeff Sessions on the back burner and await what could be the fourth rate hike in more than a decade on Wednesday.
But while U.S. equities continue to churn out gains, Eibel warned that a shaky political backdrop and anemic economic recovery could spark a selloff over the next several months.
"We do think we're due for a correction in U.S. stocks [and] a key risk is lack of policy follow-through," he said. "At some point the market will get tired of waiting for tax reform and other key policies from the Trump administration. There's a continued risk to the downside."
Additionally, Eibel pointed to second-quarter GDP as a potential catalyst to take U.S. markets down. "A lot of people are banking on it to make up for the first-quarter number, it needs to deliver ... I really think that that number might be the trigger point on does this market have the legs to go higher." First-quarter GDP came in at 1.2 percent, the weakest since the first quarter of 2016.
Rather than pile into the U.S., Eibel suggested investors "take chips off the table and place them around the world globally."
Specifically, he pointed to Europe and emerging markets. "Our biggest overweight in our international funds is in Europe, we know they're not as cheap as they were, but they're still cheaper than the U.S.," he said. Eibel added that European equities will remain more attractive than the U.S. as its economy continues to grow at the same rate as the U.S. and ECB President Mario Draghi maintains interest rates at zero.
"Europe is our biggest overweight in our international funds and a slight overweight to emerging markets in general. Just as oil is certainly not in the mid-20s anymore and developing markets are growing around 4½ percent, the dollar's not quite as strong. So, an overweight to emerging in general and Europe specifically," Eibel added.