Stocks in a "sweet spot" for gains: Levkovich

NEW YORK (Reuters) - Just as investors are fleeing stocks for less risky assets, they should be taking advantage of the recent sell-off to load up on equities, said Citigroup's chief U.S. equity strategist.

"If you look at the past 75 years, the best place to invest in terms of multiples in the market for subsequent one-year performance was 14 to 16 times earnings," said Tobias Levkovich, Citigroup's chief U.S. equity strategist, speaking at the Reuters Investment Outlook Summit in New York.

The Standard & Poor's 500 index .SPX has fallen 7.5 percent since May 10, when a global sell-off in commodities, emerging markets and stocks was triggered by hawkish comments from the Federal Reserve. The recent declines have improved the valuation of the benchmark index in terms of price-to-earnings.

"We're under 16 times earnings now on trailing earnings. This is the sweet spot in our P/E bull's-eye. This is where you do the best. This is where you want to be," said Levkovich. "In every single one of those instances you've never lost money."

Among the sectors Levkovich likes best are capital goods, media, pharmaceuticals and diversified financials.