The stock market's record run this year hasn't discounted one top strategist's bull case for 2021.
Meghan Shue, head of investment strategy at Wilmington Trust, told CNBC's "Trading Nation" on Friday that her firm is "very constructive" on stocks over a 9-12 month time horizon.
"We're the most bullish on the market that we've been in about a year," said Shue, whose firm manages around $124 billion in assets.
Having just added to Wilmington Trust's overweight position in equities, Shue sees three main factors driving the market higher in the intermediate term:
The strategist and CNBC contributor was especially bullish on emerging markets and U.S. small-cap stocks, adding to holdings in those two areas.
"U.S. large-cap stocks, technology stocks, have a lot of really aggressive growth targets priced into valuations at this point," she said. "We see emerging market equities and U.S. small cap as having additional upside where a lot of those ... early economic cycle benefits are not fully priced in."
She expected emerging markets in particular to benefit from a weaker U.S. dollar, more benign trade policy and a higher rate of digital adoption around the world.
U.S.-based small caps should see a lift from the economy's early-cycle dynamics, increased merger and acquisition activity from cash-hoarding companies and the shift from lagging large caps to playing catch-up, she said.
Still, Shue wasn't discounting the obvious risks.
"This is a challenging period right now as it relates to the virus," she said. "A main risk is that this persists for longer than many people are expecting, well into the first quarter where we have businesses that are shut down for a prolonged period of time."
If that occurs and January's Senate runoff elections in Georgia result in a divided government as expected, that could threaten the prospects for additional stimulus, Shue warned.
An unexpected result in the Senate runoffs could also pose a risk to stocks, she said.
"If we did have the Democrats provide an upset and win both seats there, I think you do have to weigh the risk of higher taxes in the future and more sweeping policy change that relates to regulation, energy or health care," the strategist said.
Shue was also keeping her eye on valuations, which she noted "are not a great short-term timing tool, but something we definitely have to be aware of, particularly as you look three, five years out and the more muted equity returns you're likely to see at that point."
Perhaps the biggest risk of all is the seemingly widespread consensus among investors about the stock market's direction, she said.
"We all kind of appear to be on the same side of the boat, expecting the same things to pan out, so, there is a potential for an upset," she said. "But we would encourage our clients to be looking through any short-term volatility because that is, at the end of the day, a normal part of investing and we've had a really strong run, but over a 9-12 month horizon, we think that equities will be higher."