Stocks may be a decent bargain, but there’s a good chance that investors may see even better deals on equities down the road, says Mike Mullaney, a portfolio manager at Fiduciary Trust.

“Stocks are less expensive than average,” he tells Yahoo. “We have price-earnings multiples on a forward basis of 12 now, and the average is probably 16. But if we continue in this sluggish period of economic growth, then 12 may still be too high.”

Major bull markets generally don’t begin until the P-E ratio comes down to single digits, Mullaney says.
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“So I wouldn’t be pounding the table from a valuation standpoint that it’s absolutely time to enter the stock market,” he says.

(Getty Images photo)

The Standard & Poor’s 500 Stock Index reached a high of 1,365 in April and then dropped 21 percent to its Oct. 4 low, before rebounding 17 percent.

If the economy does remain weak, then analysts will have to cut their earnings estimates to project about a 15 percent decline in 2012 from 2011. And then the S&P 500 could drop as far as 25 percent to 30 percent, he says.

"It's not pretty.”

But not everyone is so bearish.

The recent rally may continue, sending the S&P up another 13 percent says Sam Stovall, chief equity strategist at S&P Capital IQ.

That comes from his study of eight periods of “near-miss corrections or baby bear markets,” similar to this one, as Stovall tells CNBC.