Investors should start getting used to wild market swings.
That's the advice of Savita Subramanian, Bank of America's head of US equity and quantitative strategy.
"Volatility is the new normal," Subramanian told CNN business correspondent Alison Kosik on "Markets Now" on Thursday. "We need to just prepare ourselves for volatile markets."
Most recently, the Dow has been reacting to news on the trade war between China and the United States.
The arrest of Huawei CFO Meng Wanzhou in Canada at the request of the United States renewed doubts about the US-China truce and sent the Dow plunging on Thursday. Before that, stocks rallied on news of a truce and then fell as uncertainty returned.
But even if trade tensions ease, Subramanian expects the markets to continue to swing over the next few years.
"One of the most reliable predictors of market volatility is the yield curve," she explained.
The yield curve is the gap between short and long-term Treasury rates, an metric that can shows investors' sentiment about economic performance in the future. The yield curve has been flattening, a signal of concern that the US economy could enter recession in the coming years.
Though Subramanian doesn't necessarily see a recession on the horizon, she sees the flattening as "a very good predictor that volatility is likely to remain."
Investors shouldn't take the warning as a recommendation to sell, Subramanian noted.
"The worst thing to do in a volatile market environment is to sell on emotion or panic sell," she said. "That is the route to under-performance."
Investors should be picky about their stocks and hold on to them. Software makers, financial firms, utilities and health care companies are a good bet, she said.
"Markets Now" streams live from the New York Stock Exchange every Wednesday at 12:45 p.m. ET. Hosted by CNN's business correspondents, the 15-minute program features incisive commentary from experts.
You can watch "Markets Now" at CNN.com/MarketsNow from your desk or on your phone or tablet. If you can't catch the show live, check out highlights online and through the Markets Now newsletter, delivered to your inbox every afternoon.
- Equity strategist: Volatility is the new normal
- Volatility is the new normal. Here's what investors should do
- Top strategist calls market bottom
- Market volatility isn't going anywhere
- BlackRock strategist on how you should invest
- NYSE trader: We prefer no volatility
- Why gold is plunging despite market volatility
- Mnuchin fails to calm volatile markets
- Volatility is back. It was just hibernating
- BlackRock strategist: Don't worry, banks will continue to grow