BlackRock is taking a slightly more conservative stance on the stock market for this coming quarter, as last year's spectacular returns are unlikely to be repeated, Bob Doll, vice chairman and global chief investment officer for equities, told CNBC Tuesday.
"We just pull our horns in a little bit," Doll said.
The stock market is likely to take "two steps forward, one step back" as companies now have to deliver, in contrast with last year's rally from the lows hit in March, he said.
But investors with cash should not sit on it, but go into the stock and bond markets, according to BlackRock.
One of the best sectors to invest in is healthcare, where Doll said he prefers Amgen. Also, "we're not giving up on technology. Software and services, we still think the US will gain market share," he added.
BlackRock is overweight companies with a strong balance sheet and, in technology, prefers Microsoft, which has a new product cycle and a good balance sheet.
In the energy sector, Doll said he likes oil services companies such as Schlumberger .
Mergers and acquisitions are another factor that could push stocks higher this year, as companies realize that organic growth will be hard to achieve, he said.
In the bond markets, investors will have a hard time in finding yield this year, when the Federal Reserve's exit strategy will be the focus of attention, Curtis Arledge, co-head of US fixed income at BlackRock, said.
The Fed is unlikely to hike rates this year, but rates all over the world are likely to increase as they have been too low, Arledge added.
He said investors could start looking at non-US fixed income markets, in countries where governments show fiscal discipline.