Jitters over tax reform may have sent small-cap stocks lower on Tuesday, but investors shouldn't be making any changes based on the tax plan just yet, value investor David Katz told CNBC.
The Russell 2000, which is expected to be the main beneficiary of the Republicans' tax reform plan, closed down more than 1 percent on Tuesday.
"We wouldn't do anything in terms of investing for or against stocks on the tax plan. There are going to be tremendous changes between now and when it's finally implemented, so we wouldn't make any wholesale changes to your portfolio," Katz, president and chief investment officer of Matrix Asset Advisors, said in an interview with "Closing Bell" on Tuesday.
The GOP tax bill is currently making its way through Congress. The House is currently marking up, or debating and amending, its legislation and could pass it as early as next week.
It's unclear when the Senate will release its plan. On Tuesday, Senate Majority Leader Mitch McConnell said Senate Republicans would release the legislation on Friday, but his spokesperson later said he misspoke. Earlier in the day, Sen. Orrin Hatch, R-Utah, told NBC News the proposal would be released Thursday.
Katz said he isn't overly concerned about the market if tax reform isn't passed. He said if that happens, in the very near term there might be a selloff.
However, "we think that stock valuations are OK, interest rates are low and the economy is good regardless of whether the tax plan passes or not. And if it does pass, it is icing on the cake. You can get a nice 10 percent earnings pickup."
Meanwhile, overall in the market Katz expects a pickup in volatility merely because it has been absent and volatility is normal.
"If you're an investor don't chase the fact that the market's done great. Expect volatility; buy into any sort of weakness," he advised.
— CNBC's Jacob Pramuk contributed to this report.