Financial markets appear vulnerable to what could be an extreme move in either direction, according to Paul Gambles, co-founder of investment advisory firm MBMG Group.

Gambles advised investors to avoid taking risks and increase their cash position.

His comments come as market participants remain cautious given a flurry of risks on the horizon. These fears include rising inflation, concerns over the economic outlook, ongoing concerns regarding supply shortages, valuation issues, and concerns about price volatility.

Some investors are also wary of the possible implications of China’s indebted property firm Evergrande, which is on the brink of default.

We advise being cautious. Gambles said that the market was very well poised and waiting for what could potentially be a very large move on CNBC’s SquawkBox Europe.

He said, “We don’t know which way that might go; that may not sound very helpful. But there’s so much unanswered right now.” We advise that you do not take on what may be a very big hit and potentially a long-term hit until we get those answers.

Gambles said MBMG Group, which says it has over $1.5 billion assets under advice, has looked to raise cash levels “quite dramatically” of late, warning market risk had “suddenly gone up and off the scale” compared to just one month ago.

He said that gold and miners are “one of best ways to hedge risks” at the moment. This suggests there is still value in Treasuries.

Gambles stated, “Take these profits.” You should not be afraid to miss out, but be willing to accept the possibility of some very serious losses in case of a reversal.

We aren’t saying there’s an absolute crash here. Far from it. Gambles stated that it is a flip of the coin as to whether or not things turn out well.

It was the first time Gambles had advised clients to keep cash for some time.

Gambles stated, “This is an important moment in our lives and we don’t know whether or not it will be a positive outcome.”

Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, told CNBC’s “Squawk Box” earlier this week that investors should not deal with market risk by hiding out in cash.

Dalio spoke at the New York City’s SALT conference, “Don’t keep it in money.” Dalio, who said “cash” in January that cash was garbage, stated that this sentiment is still held by him on Wednesday.

Instead, the hedge fund billionaire said the most important thing for an individual investor was to know “how to diversify well.”

Dalio claimed that diversifying across currencies, countries and asset classes will outperform investing in cash.