After eight solid months for the market, the odds are no longer in investors' favor, according to Doug Gordon, senior portfolio manager at Russell Investments.
"I think there's some asymmetry here," Gordon said Friday on CNBC's "Trading Nation." "Certainly the upside isn't equal to the potential for downside, when we look at it in a multi-asset context."
This unfortunate asymmetry comes on the back of — and indeed, is somewhat the result of — a significant rally.
"Most investors are in a position now where it would be safe to give away some of the upside potential to protect against the downside," Gordon wrote in a recent note to clients.
He pointed out that U.S. stock market valuations are high in a historical context and noted that bonds "look awfully expensive as well."
Indeed, with the 10-year U.S. Treasury yield approaching 2017 lows even as the economy appears to be on solid footing, Gordon prefers American stocks to bonds.
Yet "inside equity, we'd like to be outside the U.S., with an appropriate stake inside the U.S. as well," he added.
Specifically, he favors European stocks, which are generally lagging their U.S. counterparts.
More generally, Gordon says that due to the relatively expensive state of markets, "long-term returns are going to be somewhat challenged, compared to historic levels."
The S&P 500 is sitting on a 10.6 percent gain for the year.