NEW YORK (TheStreet) -- Stocks may be flirting with record highs, but don't get too comfortable, one strategist warns.
"We have to be on edge about a correction," said Jeff Tomasulo, CEO and head portfolio manager at Vespula Capital. "I am very cautious right now. Since 2009, we are up tremendously and when you have a move that we've had from the bottom, you have to be cautious."
The S&P 500 is up 211% since its March 2009 low.
"In certain sectors, we're overvalued and other sectors we're at fair value," he said. "We're looking at the positions we have in sectors like technology and biotech and we're cutting that back and taking our profits."
He said the Chicago Board of Options Exchange's Volatility Index (VIX.X), which uses options to track volatility over the next month, has been below its mean over the past two years. "We're buying VIX futures to protect our portfolios." When fear enter the markets, the VIX would rise. Tomasulo is looking for compensation should investor anxiety spike.
With the start of May upon us, some investors have adopted the strategy of "sell in May and go away" -- that is, sell your holdings, take your profits, and return to the market in about six months.
Tomasulo points out that investors who employed that strategy last year missed out. From May to November of 2014, the S&P 500 rose over 7%; and 11.2% during the same period in 2013.