Buy the Dips—Markets Are 'Long and Strong': Strategist

Investors need to be a buyer of every stock market dip until the Federal Reserve ends quantitative easing, said Paul Schatz, president of Heritage Capital.

“The strategy has been the same all year—we’ve been surfing the tsunami of liquidity for two years and until that changes, the market’s long and strong,” Schatz told CNBC.

Schatz said he sees a further boost in energy stocks in April/May or early June.

Counterpoint: Energy

In the meantime, Paulsen said the markets are beginning to peak out.

“I would take advantage of the price strength in the stock market by lightening up exposure on the energy stocks, commodities and even TIPS,” he suggested. “Look at reallocating some of the portfolio to tech stocks and industrials.”

In addition, Paulsen said investors should pay close attention to companies’ earnings forecasts.

“That might be what wags the dog more than the earnings season themselves.”

Schatz Likes:

Oil Services HOLDRs

JPMorgan Chase

SPDR BCS Cap High Yield

Currency Shares Japan Yen

Paulsen Likes:

MSCI Emerging Mkts

S&P Technology

S&P Industrials

Scorecard—What They Said:

  • Paulsen's Previous Appearance on CNBC (Apr. 4, 2011)
  • Schatz's Previous Appearance on CNBC (Mar. 24, 2011)

More Market Intelligence:

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No immediate information was available for Paulsen or Schatz.