It seems the old adage, ''be careful what you wish for" might be timely advice for the stock market right now, since the best first quarter since 1998 - with nary a dip to buy - and a 30% pop in 6 months, has left many a money manager begging for a sell off.
However, Ed Dempsey, founder and chief investment officer of Pension Partners, is not one of them. In fact, he thinks the climate is right for this mini-bull to tack on another 30% this year.
"Everyone is still betting on the pullback which is the reason you're not getting it," he says in the attached video. "In a period of reflation where you have lots of liquidity, lots of credit being extended, you can have these very explosive moves and they catch people off guard."
That's right, folks. The great "Spring Switch" is underway, a period in which Dempsey thinks the rotation of money from ''perceived riskless assets" like Treasuries, into reflating and growing assets, like stocks, will carry this market to new heights. By my math, north of 1800 on the S&P 500 is where we'll be after a 40% yearly gain.
"The Fed has made riskless assets incredibly risky," he says, explaining that "what the Fed is trying to do is to ignite a fire under risk assets by making it incredibly painful to hold these perceived risk-free assets."
If you don't believe it, he says all you have to do is look back and listen to what Ben Bernanke says and does when there's been any meaningful reluctance in the stock market.
And so, fully convinced that Bernanke has got his back, Dempsey's playbook is actually quite simple. Own ''equities in general" and financials in particular he says, adding that the next beneficiary of the reflationary rotation will be the Emerging markets (EEM), which he predicts are poised to ''really catch fire'' in the next few months.