Risky assets will continue to outperform safer assets and investors should stick to bonds and quality stocks such as Johnson & Johnson, Intel and CSX, instead of Treasurys and cash, Bob Doll, vice chairman and global CIO of equities at BlackRock, told CNBC.
"Our view is that risk assets will continue to outperform safe assets. That is equities and corporate bonds over Treasurys and cash," Doll said.
The economy is showing signs of recovery, even if growth is less robust than usual after a recession, he said.
"We have to respect those cyclical positives," he said. "You need to own these risk assets, but play the higher quality ones."
- Watch the full interview with Bob Doll above.
Doll thinks that Johnson & Johnson, Intel and CSX all fit the bill and count as "quality" investments.
The US consumer is likely to remain strapped for the next two-to-three years, but investors should respect that fact that the savings rate has improved so quickly, he said.
"The consumer, I like to say, is still in the hospital but definitely out of the intensive care unit," Doll said.
The recent dollar weakness is not the "death knell" that some think it is, but a stable or stronger greenback would be much better, according to Doll.
Even though Doll is in favour of a stronger dollar, he told CNBC it is too early for the Federal Reserve to start raising interest rates.
"We raise rates now, I think we'll have an economic problem. We need a little bit more time I think and a little more evidence of sustainability of economic recovery. But then they've got to get started," he said.