Don't Sell Yet, Dow Headed to 18,000: Pro

Sell in May and go away? Not according to one portfolio manager who says the Dow Jones Industrial Average closing above 15,000 for the first time on Tuesday is just the start of a rally that could take the benchmark to 18,000 in two years.

Gene Peroni, senior vice president & portfolio manager at Advisors Asset Management said an improving U.S. economy, historically low interest rates driven by the U.S. Federal Reserve's easing program, added to company earnings continually beating expectations is going to drive the Dow nearly 20 percent higher by 2015.

The Dow rose to 15,056 on Tuesday just three months after regaining the 14,000 level in February. The S&P 500 also reached another record, finishing at 1,625. Both the Dow and S&P are already up 20 percent since November's lows.

(Read More: Market Gains Could Keep on Coming After Dow 15,000)

The Fed's ultra-loose monetary policy that started at the end of 2008 with three rounds of monetary easing has flooded global equity markets with liquidity.

"No doubt the Fed has played a very significant role here and if there was no sign of economic revival, then I would say yes, we would really be in a pretty dire situation," Peroni told CNBC Asia's "Squawk Box" on Wednesday. "But the fact of the matter is the economy is really improving in a number of different areas... there's real evidence the Fed is really having a positive bearing."

NYSE Wall Street
Adam Jeffery | CNBC

Last Friday, the U.S. reported strong jobs growth for April, beating expectations, while housing data released earlier in the week showed contracts to own previously owned homes rose in March, boosting optimism for an economic recovery.

(Read More: Time to Scale Back Easy Money: Fed's Plosser)

Peroni says, the Fed's transparency on keeping interest rates "virtually at zero" has taken monetary uncertainty out of the market, which can now focus on fundamentals like earnings to support gains.

"Earnings are really starting to show some real drive here...beating expectations on Wall Street by a very significant margin quarter after quarter even though we're told every quarter it's not going to happen," Peroni said. "The market likes anticipation, that's what it's getting right now - good expectations."

In April, nearly 70 percent of the companies listed on the S&P 500 that reported first quarter earnings have beaten forecasts.

(Read More: US Earnings Beating Forecast but Jury's Out on Rest of Season)

Peroni added this was not the time to get out of outperforming equities into cyclical and defensive plays.

"I think the risk right now is selling good stocks too soon," Peroni said. "I would stay the course with the stocks and sectors that have been showing the best relative behavior not just last month or two or the last several quarters, but over the last several years."

- By's Rajeshni Naidu-Ghelani; Follow her on Twitter @RajeshniNaidu