A $1 billion fund manager has moved heavily into cash, warning that markets may not yet reflect the full risks of stagflation and ongoing global uncertainty.

Eddie Ghabour, managing partner at Key Advisors Wealth Management, said his firm has sold roughly 70% of its stock holdings in recent months, taking a defensive stance as volatility rises.

“We don’t think the market is properly assessing the risks,” he said, pointing to growing concerns about a potential stagflation environment.

Defensive Mode: Cash Over Stocks

The firm has significantly reduced exposure to equities, especially in sensitive sectors like: Technology, Software

Instead, it is holding:

  • Higher levels of cash
  • Limited exposure to gold and fixed income

Ghabour believes current conditions are very different from past market dips, where quick recoveries followed shocks.

“This is a much different scenario,” he said.

What Needs to Happen Before Buying

Despite the cautious stance, the firm is not bearish long term. It is simply waiting. Ghabour said two key signals must stabilize before re-entering the market:

  • 10-year Treasury yields
  • Oil prices

Right now, both are moving too aggressively, creating uncertainty for investors and businesses. Until energy prices fall and bond markets calm down, the firm is avoiding new long positions.

Dip Buying… But Not Yet

While many investors are eager to “buy the dip,” Ghabour believes it is still too early. He expects markets could fall further, meaning better opportunities may come later.

“If you’re fully invested, you’ve got nothing to buy the dip with,” he said, highlighting the importance of holding cash during uncertain periods.

Big Tech Still the Target

When the firm does return to the market, the focus will likely be on Big Tech.

Ghabour specifically mentioned: Nvidia, Apple, Applied Materials

He believes these companies will benefit once conditions stabilize and sees the current volatility as setting up future opportunities. The strategy reflects a growing divide among investors. Some are buying the dip. Others, like Ghabour, are stepping back and waiting for clearer signals.

For now, his message is simple: The opportunity will come but the timing is not here yet.

Related: Investors Turn to New Strategy as Stocks and Bonds Fall Together

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