A number of dividend-paying stock sectors are trading at "fairly extreme valuations" and will come down — it's just a matter of timing, strategist Vadim Zlotnikov said Monday.
"You know that the expected returns over the next couple of years are likely to be significantly lower than they've been in the past. You know that the investors' willingness to pay up simply for the companies that raise their payouts is somewhat irrational," the co-head of multi-asset solutions and chief market strategist for AB Global said in an interview with CNBC's "Power Lunch."
It's difficult to know at what point the trend will break, but the most important red flag will be wages, he added.
"I do think that any talk of fiscal policy, any signs of significantly stronger wage growth and I think those groups will start to underperform," he said.