• Francois Savary, chief investment officer at Switzerland's Prime Partner, said it was difficult to make even short-term calls on the global economy given recent events.
• "The two elements that can support a further rally ... are not clearly there," he said.
• Rather than chasing rallies, investors should look to the flexibility provided by cash and invest strategically in stocks to hedge against inflation.

Investors should eschew chasing recent rallies in stocks and bonds given the current economic uncertainty, according to the chief investment officer of Swiss asset manager Prime Partners.

Francois Savary said it was hugely difficult to have clear economic visibility due to the particulars of the current investment cycle, such as the Covid-19 recovery and the Ukraine war.

"One of the key factors that supported the rally, which was a strong bond market during the month of July, has disappeared to a certain extent," he told CNBC's "Street Signs Europe" on Monday.

Additionally, while the second-quarter earnings season has been robust so far, a key issue looming is how much analysts will revise their third-quarter earnings forecasts. "So we consider that the two elements that can support a further rally in the equity market are not clearly there," Savary said.

As such, he said investors should "absolutely not" be chasing the rally in equities that has been underway since mid-July. The S&P 500 is up almost 13% from its July lows, closing at 4,140 on Monday, but remains down since the start of the year.

On bonds, Savary said, "we all know it's very difficult to make money on the bonds side. I would not chase the bond rally that we experienced over the last two months."

Corporate, government and high-yield bond funds saw sizeable inflows last month. The U.S. 10 Year Treasury yield — which moves inversely prices — has slipped to trade around 2.76% on Tuesday after topping 3.48% in mid-June.

Investors in global markets are navigating a whirlwind of inflationary pressures, recession risks and central bank tightening cycles, with even juggernauts such as Berkshire Hathaway and SoftBank posting investment losses in the June quarter.

"It's a very difficult market environment," Savary told CNBC. "You need to have some hedge funds [and] some kind of decorrelating strategy that are in your portfolio."

Keeping some investment in stocks will provide partial protection from inflation, he said, however investors will need to be tactical and observe the latest economic figures.

Meanwhile cash, Savary said, is useful for providing flexibility.

"It's interesting to have some cash to check because everything is possible in this kind of environment. We could have a recession, but you could also get a slow but satisfactory rate of growth in the coming 12 months," he said.

For now, Savary said the market has priced in a recession. "But the numbers are not telling you that there is a recession, so we need to be nimble and to check what is happening week-by-week and month-by-month, and we should have more visibility by the early fall, in the U.S. in particular."

U.S. gross domestic product fell for the first two quarters of the year, meeting a common definition of a recession, although the NBER defines it differently and the White House insists the U.S. is not currently in recession.

Investors will be looking to U.S. inflation data out Wednesday for further clues on the state of the world's largest economy. It comes after the jobs report for last month showed unexpected strength and increased expectations of a 75 basis points rate hike in September.