Earnings growth is about to slow down, David Kelly, JPMorgan Funds chief global strategist, told CNBC on Monday.
Earlier Monday, the Dow, S&P and Nasdaq hit record highs. Kelly attributes this to people feeling good about the economy, among other things, but he isn't optimistic for the future.
"I think by the second-half of next year, whether we get fiscal stimulus or not, I think we're going to see a slow-down in earnings growth because of stronger wage growth, [and] higher interest rates. So I think investors should enjoy it while it lasts, but recognize that we're coming towards the tail-end of these really good numbers in earnings growth," he told CNBC's "Power Lunch."
Kelly recommends that investors be more cautious and avoid relying only on the big indices.
"You need to be a little bit more cautious, and you need to make sure that you don't invest in the most exuberant sectors… I think there's opportunities in Japan, I think there's opportunity besides the United States in general," he said.
He specifically advises against expensive energy and certain technology stocks.
"Those are the things that people believe in on pure faith as opposed to actual earnings growth. That's where I worry," he added.