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US stock markets will likely continue to confuse both bulls and bears next year, but a recession-fueled crash is not on the list, according to veteran investor Bob Doll.

Doll — the CIO at Crossmark Global Investments and former chief US equity strategist at BlackRock — expects the S&P 500, Dow Jones Industrial Average, and Nasdaq indexes to swing through the first half of 2023.

"We're not gonna go straight up. That doesn't mean we have to turn around and go straight down either," Doll told Fox Business last month.

"We're in this broad trading range, and we're at the higher end of it. And it's going to frustrate both the bulls and the bears."

Investors are starting to fear a potential US recession next year as the Federal Reserve's aggressive interest-rate hikes wreak havoc on the economy. Bank of America and Morgan Stanley have said an economic downturn could lead to US stocks crashing by almost 25% in the first quarter of 2023.

Doll said there's no need to flee markets entirely, but it'll be essential to be selective when investing in equities.

"We might have a recession in '23. But it's not going to be a doozy like we've seen sometimes in the past," he said.

"When we talk to financial advisors, what we try to say is pick your spots. You don't have to chase it on the upside — wait for a pullback," he added.

"We're not in this straight-up bull market. So make sure you have some quality in the portfolio but also some economic sensitivity for the other end of it."

"People are looking past the slowdown," he said. "I'm not sure we're not going to have tests of that over time." 

"What the Fed has done is the fastest pace of rate increases in history with a lag in terms of impact," he added. "We're not going to know what the Fed has done and how it impacts the economy until into the first half of next year."