×

Next couple of months could be very dangerous for investors, expert says

The stock market's recent slump may be the beginning of a move down, veteran industry insider Jack Bouroudjian said Tuesday.

U.S. equities closed down sharply Tuesday after rallying Monday. However, Monday's rally followed a sell-off on Friday.

"I've got a feeling these next couple of months could be very dangerous for investors," the co-founder and director of UCX said in an interview with CNBC's "Closing Bell."

A trader works on the floor of the New York Stock Exchange (NYSE).
Getty Images
A trader works on the floor of the New York Stock Exchange (NYSE).

That's because for the last few months, investors have been chasing yields and treating stocks like bonds, he explained.

"Now all of a sudden they're getting that volatility back, and guess what? … They start to smell the election, they start to smell all those uncertainties and before you know it we've got a big move in the markets," said Bouroudjian, also a CNBC contributor.

Michael Farr, president of Farr, Miller & Washington and a CNBC contributor, also thinks the election may be a big factor in the market's decline.

"The expectations for a Clinton presidency might have been upset some over the weekend, and I think that you are seeing some traders begin to vote with their feet," he told "Closing Bell."

Questions about Hillary Clinton's health arose over the weekend after she left Sunday's 9/11 memorial service in New York City. Her doctor said she was diagnosed with pneumonia Friday and suffered dehydration at the event. On Monday, she told her Twitter followers she is feeling fine and getting better.

For Keith Bliss, senior vice president at Cuttone & Company, the fact that both stocks and bonds are going down together is a "classic global growth concern story."

What's more, it also shows that the central banks are "tapped out" and can't do any more.

"For the longer term, I think we're going to see some weakness in this. September is always a volatile month. On the shorter term, I think there's some excellent opportunities to step in here," he said.

If the Federal Reserve decides not to raise rates at its policy meeting next week and releases a dovish statement, he expects to see the market rally again.