Money manager Douglas Gordon is worried about a potentially widespread problem in long-term investors’ portfolios.
According to Gordon, the market rally’s robust gains are tilting investors too far into stocks.
The bottom line: If there’s another pullback, it’ll leave them wide open to losses that may have been avoidable.
“It’s a good time to re-assess where you’re at with respect to being diversified in a multi-asset solution,” the firm’s senior portfolio manager said Friday on CNBC’s “Trading Nation.”
Since the Christmas Eve plunge, the S&P 500 has soared 18 percent. Because of the market’s sharp rebound, Gordon suspects a 3 to 5 percent sell-off could strike stocks in the coming weeks.
For protection, Gordon recommends taking some profits from the historic rally. Plus, he’d consider going overseas, a strategy he’s employing right now as part of a balanced allocation strategy.
“I’d probably right now prefer to take my higher beta exposures maybe in EM [emerging markets],” said Gordon, who’s responsible for $ 48.5 billion of the firm’s assets.