As Greek riots escalate in Athens, the "big risk" investors haven't noticed is the emerging markets, Richard Bernstein, CEO of Richard Bernstein Advisors, told CNBC Monday.
"[Emerging markets] were the biggest beneficiaries of the credit bubble," he said. "They're now faced with the problem that the United States had about two years ago with inflation."
Markets like China and Brazil now face the dilemma of fighting rising prices or propping up economic growth. Brazil's central bank, for instance, has prioritized growth by cutting interest rates again this year. As a result, inflation expectations remain above the long-term objective of 4.5 percent.
And while China's market slumped some 25 percent last year, Bernstein pointed out, U.S. markets moved slightly higher:
"I'm on board for the U.S. equities markets; I'm not on board for emerging markets."
Still, Bernstein cautioned against piling into risky U.S. assets:
"Risky assets do not work on the downside of a credit bubble," he says. "That's what we're seeing right now, but longer-term, I don't think that's going to work."