Newsmax Finance Insider Ed Yardeni says that recent market bloodbath will work eventually in investors’ favor, if they know what to buy and where to seek bargains.

"I think it's going to be a stock picker's market as opposed to the markets driven by the central banks," the president of Yardeni Research told CNBC. "And for those of us who are investors, we might actually look forward to that,"

Yardeni's S&P 500 year-end target is 2,000, or 10 percent higher than current levels, CNBC reported.

He thinks such industries as housing, healthcare and consumer discretionary are poised to rally, driven by strong employment numbers and consumer confidence.

"My investment strategy, really throughout the bull market, has been a "stay home" strategy as opposed to going global," said Yardeni. "I just felt like the global economy has got a lot of risks; it's gotten worse, not better."

Meanwhile, the Federal Reserve's carefully scripted decision to raise interest rates last December, and begin a return to "normal" policy, may now become a nightmare for the central bank if an economic downturn forces a return to unconventional methods.

Fed chair Janet Yellen told lawmakers this week she was studying ways to "be prepared" in the event the current slide in world stock markets, concern about financial sector stress, and slowing economic growth all translate into a recession or another financial crisis, Reuters reported.

But Yellen said the policy tool of negative interest rates, now favored by some foreign central banks offers no sure bet for the U.S. economy.

"So they got themselves into a real trap here," said Yardeni of the Fed. "Because if they start talking about the economy doing pretty well and the markets rally a little bit, and they start talking about raising rates again, they're going to get another tightening tantrum."

(Newsmax wire services contributed to this report).

Dr. Ed Yardeni is the President of Yardeni Research, Inc., a provider of independent global investment strategy research. To read more of his blogs, CLICK HERE NOW.

Related Stories:

• Yardeni: We Risk Talking Ourselves Into Recession
• Yardeni: 3 Reasons for Optimism About American Economy