Market Outlook: Bumpy Bull Ride Ahead

There's little agreement about what will happen this time, except that it won't be nearly as bad. Some think that investors have seen enough budget brawls that they won't be fazed by another one.

"People are pretty much sick of hearing about this," says Joseph Tanious, the global market strategist at JPMorgan Funds. The S&P 500 is already off to its best start in decades, climbing 6% so far this year. Kleintop, however, says the buoyant mood is unlikely to last. If more companies keep warning of slower earnings in the coming weeks, the pile-up of worries could unnerve investors. Without another last-minute deal between Congress and the White House to avoid the budget cuts, the stock market's gains could be erased as early as March, Kleintop says.

The good news is that even those who believe the ride is about to get bumpy expect it to end well. Unlike previous years, it's hard to find anyone predicting a crash or a replay of 2008. They mainly believe the stock market can't keep up its blistering start. Repeat the S&P 500's surge in January over the rest of 2013 and it works out to an annual gain of 79% -- roughly nine times better than the historical average.

For all his skepticism, Kleintop expects the S&P 500 to end the year trading around where it is now. He's drawn up a list of companies he plans to scoop up after the next big drop.

"It will be a buying opportunity," he says. "We'll be ready to step in, because this bull market isn't over."

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