With Expensive Valuations, This Market Pro Says Consider Selling The Rallies

Amid expensive valuations, Stephen Wood of Russell Investments recommends investors to sell the rallies.

"You would want to sell the rallies right now. Valuations in the short term looks expensive," Wood said on CNBC.

In the medium term and long term, however, Wood said valuations will become "very, very powerful."

Wood noted that the market and Fed are still divergent. While the odds of a June rate hike have dropped dramatically, July and September are live meetings.

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Wood expects markets to be flattish from here, and he is looking toward Europe, Japan and emerging markets "where the valuations are more of a tailwind."

In the United States, Wood says the valuations are still somewhat high and recommends investors use the volatility to trade around positions.

"A discount of 7–10 is a good opportunity," Wood said. "But in medium term, you would want to underweight US, overweight European equities and Japanese equities."

At the time of writing, the benchmark S&P 500 index is up 0.34 percent to 2,119.33, the Dow up 0.38 percent to 18,005.97 and the Nasdaq rose 0.27 percent to 4,975.24.