A true bear market is really nowhere to be seen, veteran bull Rich Bernstein says

An Institutional Investor hall of famer has a message for investors: Don't turn too cautious.

Richard Bernstein, who has spent decades on Wall Street, believes the late-cycle economic environment is creating too much confusion on Wall Street — pushing many investors to make ill-advised decisions.

"Late in the cycle makes it sound like the abyss is minutes away. That's not really where we are," Bernstein said Monday on CNBC's "Trading Nation." "The signs of what would really signal a true bear market are really nowhere to be seen."

His thoughts came as the Nasdaq was registering its worst day since July. The tech heavy index fell 114 points or 1.43 percent to close at 7,895.

"It's a very, very cyclical sector, and people forget that. So, if you're worried about global growth, you've seen it in the emerging markets. What you're seeing in tech is the exact same thing," said Bernstein, a CNBC contributor and CEO of Richard Bernstein Advisors.

That doesn't necessarily mean it applies to the rest of the market.

According to Bernstein, the U.S. economy is firing on all cylinders, and earnings should remain strong through next year.

However, his forecast comes with a caveat. Investors may want to shift their portfolios to reflect the uptick in inflation that late-cycle bull markets bring. It's a trend that isn't being taken seriously enough, he said.

"You have massive flows into bond funds at a point in time when the economic environment is very poor for bond and bond returns," he said. "Everybody is kind of underweight pro-inflation investments."

To position for rising prices, Bernstein favors energy, materials, industrials and even gold, which has fallen 8 percent during the past six months.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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