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According to Victoria Fernandez of Crossmark Global Investments, a successful earnings season will play a vital role in the market's ability to maintain its record highs.
The chief strategist believes that Wall Street does not take into account the second profits expected at the moment, leaving little room for disappointment when the season starts on Monday.
"Profits could be volatile," she said Friday at "Trading Nation".
But according to Fernandez, a long-term bull, a setback would probably be short-lived.
"We think the trend will be stronger in the markets," she said. "[Investors] feel like the Fed has their backs, and so markets continue to run on that. "
On Friday, the main indices recorded all-time highs and a new record close. Since the beginning of June, the Dow, the S & P 500 and the Nasdaq have jumped by 10%.
Fernandez, head of $ 5 billion badets, acknowledges that risks remain – including the US Federal Reserve, surprising Wall Street by deciding not to cut rates later this month. It is also closely following developments related to the US-China trade war and potential new tariffs on Europe.
Still, Fernandez is fully invested.
"We are taking a longer-term perspective, so we do not trade in the headlines published every day," she added. "We have not taken an extremely cautious approach in retaining cash funds."
But Fernandez does not buy the stock all at once. She is selective and particularly fond of core values to prepare for the short-term volatility of the market. She gives as examples McDonald and Intel.
"We continue to find companies that we believe may have been a little jostled and offer high growth potential over the next two, three or four quarters," Fernandez said.
Disclosure: Crossmark Global Investments owns shares of McDonald's and Intel. Victoria Fernandez owns McDonald's in her personal portfolio.
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