The S&P 500 has surged 30% since Aug. 26, a day before Fed Chairman Ben S. Bernanke said in Jackson Hole, Wyoming, that he was willing to act to boost growth. In November, the central bank pledged $600 billion in bond purchases through June. The benchmark measure for U.S. stocks closed at an almost three-year high Wednesday after the Fed renewed its pledge to stimulate the economy.

Cliggott cited last year as an example of the potential for declines after the Fed stops helping the economy through so-called quantitative easing. The S&P 500's price-to-earnings ratio slumped to a low of 13.6 in July from a high of 18.7 in March 2010, according to Bloomberg data. The S&P 500 now trades at 15.6 times earnings.

"We don't think we'll get as severe a decline in P/E multiples this time around," Cliggott said. "But we do think 1.5 multiple points will come off the market and that will translate into about a 10% pullback."

Year-End Forecast

Cliggott forecasts the benchmark gauge for U.S. stocks will end this year at 1,250, the second-lowest prediction out of 13 strategists surveyed by Bloomberg News. The average estimate is 1,400.

Investors will get the "best value" by buying companies with the most market value and the highest dividends, according to Cliggott. He said that accelerating inflation may curb U.S. economic growth in the second half of the year. The Fed said yesterday the increase is probably temporary.

"We're getting both a downshift in consumer spending and a downshift in business spending," he said. "There's a reason to be optimistic that business spending will pick up because companies have a lot of cash and continue to invest in technology. The real $64,000 question is the American consumer. It's pretty uncomfortable with oil prices and food prices climbing higher."