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Bull market needs one thing to keep going: Josh Brown

Morgan Korn

After reaching a major milestone last week, stocks have been a mixed bag; U.S. markets have largely shrugged off escalating tensions between Western nations and Russia this week over a possible annexation of Ukraine's Crimea region. Early Wednesday afternoon major indexes were flat as investors awaited comments from Fed Chair Janet Yellen.

Many investors are beginning to wonder if the five-year-old bull market has hit its peak.

Related: Bull market celebrates its 5th birthday: But is the party over?

Josh Brown, CEO of Ritholtz Wealth Management and author of "The Reformed Broker" blog, says we're in the "acceptance phase" of this bull market -- a stage nestled between enthusiasm and greed. If the good times are to continue for investors, then capital spending has to increase.

While the capEx cycle remains elusive -- "there's no evidence of it yet" Brown says -- a new survey of CEOs by the Business Roundtable shows that almost 50% of the CEOs surveyed expect higher capital spending in the next six months, up from 39% three months ago.

Related: CEO Optimism on the rise! How to play the cap-ex boom

"If you're bullish now the bull case can't be more multiple expansion as was the case last year," Brown argues in the video above. "The cap ex cycle is long overdue...it's been restrained for five years."

Related: Dow 20,000 is still coming: James Altucher

If Brown is right, you may want to follow his investing lead: he's overweight industrials, financials, tech and energy -- all sectors that benefit from additional cap ex spending. Banks especially are ripe for a comeback.

"They're the cheapest sector in the market...historically very low priced to earnings," he notes. "If rates go higher then banks should do well. A lot of people still have distrust in the financial system which works in your favor if you're a long-term investor."

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