Art Hogan is concerned that jitters over an economic slowdown are driving investors to a group with little potential for gains.
According to the National Securities chief market strategist, utilities are shaping up to be a poor choice as a defensive strategy.
"I get nervous when they trade at the multiples they're trading at right now," Hogan said Monday on CNBC's "Trading Nation."
Utilities are trading at 18.65 times earnings, just under its all-time high of 19.17 times earnings in 2017. The sector's dividend yield of 3.42 percent is considered historically low, too.
The Utilities Select Sector SPDR Fund, an ETF that tracks the group, has risen 11 percent this year and over the past 12 months by 20 percent versus 8 percent for the broader index.
That demand for utilities is worrisome to Hogan.
"Their dividend yield is actually too low for an entry point," he said. "I'd be careful with the valuations."
Yet he understands why many investors think it's necessary to run to safe havens like utilities. Hogan, who has been largely optimistic on stocks since the Great Recession, won't brand himself a bull right now. He contends there are too many risks, including the U.S.-China trade war, Brexit and the potential for slower economic data.
Hogan believes he has a better strategy for investors who want to protect their portfolios: technology.
"We've had periods of time when technology is defensive because of the cash flow. 2016 was that time again. And, I don't think that's a bad idea," Hogan said.