Crowding into commodities by investors fleeing stocks will contribute to increased volatility, Peter Toogood, chief investment officer at Crosby Forsyth, told "Squawk Box Europe" on Wednesday.
Commodities "are going to be horrendously volatile because it's the only place anybody's going to be playing, including most of the hedge funds," Toogood said, adding that a serious lack of long-term investors in the stock market means the prospect of a turnaround is unlikely.
"The underlying support has basically disappeared, where are the long-term holders? Where are the institutions that buy? That is where the volatility is being created," Toogood said.
Stocks valuations are down to levels not seen since the 1980s, making a strong case for jumping in, but without the long-term investors stocks have no base from which to gain, he added.
"There are some ridiculous values out there for domestically exposed stocks, pretty much across the world. Who cares? No-one," said Toogood.
He said he is still bullish on the commodity sector, but thinks the boom is becoming increasingly precarious. He also pointed out that classic defensive plays like health care are starting to go up in the face of weakness in the overall market.
Those who are not afraid of the stock market should be underweight financials but overweight energy, while food and beverage stocks are looking quite expensive, Toogood added.