There may be more juice left in the fourth quarter.
Ally Invest's Lindsey Bell said she believes the backdrop supports December gains.
"We're positive that it will be a good end to 2020," the firm's chief investment strategist told CNBC's "Trading Nation" on Wednesday.
Bell sees optimism surrounding another coronavirus aid package providing a near-term upside catalyst to stocks. She also cites resilient consumer spending as a driver.
But Bell, a CNBC contributor, acknowledges the gains may be lower than the historical average.
"December is usually the third-best month of the stock market. You usually see the S&P 500 up about 1.5%," she said. "That might be a little more muted this year."
While constructive coronavirus aid developments should help stocks, Bell warns it will also contribute to uncertainty regarding the size and timing.
"It could make investors a little bit nervous," added Bell. "There will be some choppiness."
Near-term, she sees mega-cap technology and high-flying stay-at-home names as most vulnerable.
"Some of those names really did get ahead of themselves," she said. "I don't necessarily believe they're going to fall off a cliff. ... A lot of the product and services that some of these companies offer have become part of our everyday lives."
In this environment, Bell favors dividend aristocrats — defined as stocks that have paid and increased dividends for at least 25 years.
"They were up 12% in the month of November," she said. "Not only do they outperform the S&P 500 on a long-term basis, but they do so in a less volatile manner. So, you're building a nice diverse base by having some exposure."
She said she believes divided aristocrats, which include a big portion of economically sensitive industrial and materials stocks, will continue to grab profits as growth recovers. According to Bell, the market is underestimating the bullish impact of the Covid-19 vaccines on the economy and earnings.
"There is a lot to look forward to in 2021," Bell said.