The first half is in the books, but where should you be positioned as 2014 rolls on? A nice 7% move thus far in the S&P 500 (^GSPC) comes on top of five solid years for stocks, and many strategists are concerned valuation is the big issue with buying stocks now. If today’s selloff is any indication, a bumpy road may be a sign of things for a tired bull market. Despite these issues, Chicago's very own Jack Ablin of BMO Private Bank has three sectors that you can buy right now.

Financials

One of the laggards of 2014, financials are a sector Ablin’s eying right now. “The financials are pretty cheap,” from a relative point of view he says in the attached video. “Net interest margins are virtually nothing, but as the taper concludes, and potentially the 10-year treasury rate (^TNX) rises, then net interest margins increase, lending potentially increases (certainly that’s what the Fed would like to see), and banks move to profitability.”

With yields potentially rising, Ablin feels this creates a favorable environment for banks.

Health Care

In spite of what Janet Yellen had to say about biotech, Ablin’s not shying away from the health care sector. “I think that health care in general, particularly pharma, is still pretty cheap. A lot of it is the Affordable Care Act overhang, I think that as investors learn more about that business and how these companies are making money, they will continue to [make money] as they will have a whole new army of customers.”

Europe

Ablin’s looking across the pond for his third selection, as he believes Europe could be a high-growth trade for investors. “We think that as Europe continues to stimulate, they expand their balance sheet and actually do some QE in Europe, it pushes Europe to slightly more growth,” he says.

For Ablin, buying Europe could be considered as something of a pairs trade, as he expects money to flow from one particular area in the U.S. into Europe. “We expect that [investors] will take money out of U.S. small caps where everyone’s hanging out because they’re worried about the rest of the world and want to be insulated here… I think that baton switches to Europe and money moves from U.S. small caps into Europe.”

Ablin does caveat this trade stating he is hedging the Euro back to the U.S. dollar because he sees growth across the pond coming from a weaker Euro.

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