Stocks May Fall 4-5%, Dow 8,800: Portfolio Manager

Stock markets are due for a short-term correction of four or five percent, King Lip, portfolio manager at Baker Avenue Asset Management, said Wednesday. But he remains positive on the market for the long term.

"We remain very bullish on the market long term," Lip told CNBC. "In the short-term we actually think we're maybe due for a correction, somewhere in the neighborhood of maybe four or five percent. But we think it'll be a modest retrenchment and it actually will be a good opportunity for investors to buy stocks who have been on the sidelines."

He sees the Dow falling to 8,800-8,900 in the near term.

"The market has overshot just a little bit on the upside. The re-evaluation of the strength of the consumer will definitely come into play," he said. "And secondly, it's just about profit-taking. Investors have made a lot of money since the March lows and taking some profits off the table makes a lot of sense right now."

Lip acknowledged that short-selling in the market has dropped in recent weeks.

"Recent short interest actually has been falling. It rose the last two months, but within the last few weeks short interest has actually fallen," he told "Squawk Box Asia."

Lip sees foreign and emerging markets outperforming the U.S. as he sees a slowdown in U.S. domestic growth hampering the economic recovery.

"We do think that foreign market and emerging markets will likely outperform the U.S. domestic market ... there's a lot of repairs that need to be in the U.S. economy which I believe will actually slowdown US domestic growth," he said.

• Lip Also Expects Good Q3 Earnings -- Watch the Video for His Explanation