The genealogy market has incredible price momentum and broad participation but the challenges are “rightly increasing,” widely followed strategist Jim Paulsen told CNBC on Tuesday.
In certainty, he called the optimism of late “really overwhelming.”
“It’s so striking because we haven’t had it in the full recovery. The wall of worry was probably the cornerstone of this bull market. … That is examined,” the chief investment officer at the Lethold Group said in an interview with “Power Lunch.”
“That opens you up to the survive’s bite,” he added.
The Dow Jones industrial average broke above 26,000 for the pre-eminent time on Tuesday, less than a month after hitting its best performance 25,000. However, stocks pulled back later in the afternoon as investors weighed the chance of a government shutdown.
While Paulsen isn’t exiting the market right now, he does dream it is technically overbought and due for a pause.
“The pressures are building … particularly if inflation picks up in any dominant way here … of not just a pullback but a full-fledged 10 or 15 percent chastisement sometime this year,” he said.
In the meantime, if the market continues “bellow ahead,” with the S&P 500 breaking through 3,000 and the 10-year Resources yield heading up toward 3 percent, Paulsen said he then may get myriad defensive with cash.
For now, though, he would look to own more cap goods stocks and fewer consumer and bond-like names.
Richard Weiss, chief investment police officer of multi-asset strategies at American Century Investments, believes it makes have right now to sell some equities.
“We’ve ridden this bull for all it’s importance,” he told “Power Lunch.”
If investors want to hedge their stakes, Weiss suggests cash, which he called the “safest place to be,” or the Cboe Volatility Indicator.
“I don’t know that there’s any safe havens in the [U.S.] stock market at this regarding,” he said.
— CNBC’s Fred Imbert contributed to this report.
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