To inaugurate my return stateside, I enjoyed dinner and conversation with my colleague, Elliott Gue, editor of The Energy Strategist. Over the course of our meal, we noted how few bulls we know and that this thinning herd fears what the next sign of trouble will bring.

At the same time, the bears we talk aren’t very happy, either; they can’t fathom why the markets have rallied so strongly given the economic challenges on the horizon, overlooking that an overcorrection often ensues when all indicators and indices are extremely depressed.

And correctly assessing the US economy’s prospects is still important for investors; when the world’s biggest economy does well, others do well. These days, it’s easy to forget that the US economy still accounts for 24 percent of global gross domestic product (GDP), and the US equity market represents 42 percent of global market capitalization.

As I’ve noted before, the US is demonstrating its ability to gradually emerge from this mess. The challenges it faces are daunting and socioeconomic dynamics are changing, but the complete meltdown that some predicted hasn’t occurred yet.

Barring a significant policy error or a geopolitical crisis, expect the US economy to continue its recovery. Furthermore, as unemployment is approaching the 10 percent, expect conditions to improve a bit by the end of the year.

As things stand now, the US economy is set to surprise on the upside for the simple reason that expectations are so low; I expect GDP growth to exceed the 3 percent that many analysts expect as the economy continues to find its balance.

If the US economy manages to beat expectations (and the rest of the world has been very accommodative on that front), global markets should easily rise 20 to 30 percent in the next twelve months, even if a correction takes place in the meantime.

I continue to recommend that investors hold more stocks than bonds. Because many investors are focused on the longer-term problems facing the US economy rather than the strong market, it could pay to be positive on stocks.

With the macro picture unlikely to change for the rest of the year, investors will need to focus on technical moves.

Although overly focusing on the short term is never a good idea, a correction could still happen. But any correction be viewed as a buying opportunity; investors won’t want to stay away from the markets until the Fed starts rising rates or key emerging markets begin to overheat, two developments that should take a while to transpire.