The Federal Reserve should increase rates for the first time in nine years at next month's meeting because it won't hurt the economy and the financial markets are ready, said global credit specialist Mark Okada.
"I really wish the Fed would just rip the Band-Aid off a wound that's healed about three years ago," argued Okada, co-founder of Highland Capital Management with $21 billion of assets under management.
"The economy is in decent shape," he told CNBC's "Squawk Box" in an interview Thursday. "At this point, 25 basis points doesn't really matter to the economy. It's something that really should happen because the market has it priced in."
Holding off on hiking rates whether it's because of China, slumping oil prices or the stronger dollar could create "more volatility and more uncertainty in the market," said Okada, who is also chief investment officer at Highland.
As far as advice for investors, he said stocks appear a bit ahead of themselves.
"If you look at breadth in this market, it's not really great. The top 10 percent [of stocks] are about 80 percent of the return for the Nasdaq, and 70-something [percent] of the S&P," he continued. "The winners have been big winners and the losers are starting to get more prominent."
"It's really time to start taking money off the table where the equity market is concerned [and] rotate that into spread-sensitive markets," Okada said—especially if the economic numbers between now and the September Fed meeting indicate a rate pause.
"Maybe it's time to be pricing in lower [rates] for longer in portfolios," he said. "Don't run away from credit ... anything that's interest [rate] sensitive."