Investors are now in a wait and see mode as some of the good earnings news has been priced in, but growth is likely to resume from the autumn, Guy Monson, managing partner and chief investment officer at Sarasin & Partners, told CNBC Tuesday.
Markets experienced a "waterfall decline", then a period of consolidation, and then went through a rally; now investors are going through a period of nerves while they wait for the economy to catch up, he said.
"Stock valuations appear enormously expensive," Monson told "Squawk Box Europe." "So you're getting investor vertigo on these valuations," he added.
However, liquidity coming from central banks' quantitative easing programs is coming strongly from behind so markets are likely to see more growth, according to Monson.
He cited the example of Singapore, whose economy leapt out of recession in the second quarter, growing at an annualized and seasonally adjusted rate of 20.4 percent.
Singapore's case is an indicator of the "gargantuan freeze" in trade the world went through and which is now starting to thaw, Monson said.
With growth returning, investors will sell out of the safer bonds, returning to stocks, he predicted.
- Watch the full Guy Monson interview above.