Although he sees no signs of an impending U.S. recession, Oaktree Capital co-founder Howard Marks believes it’s time to “adopt a cautious investment strategy,” according to an article in Bloomberg.

The economy is still doing well, Marks told Bloomberg TV in Sydney, adding that despite the dearth of bargains in many markets, “strategies should still focus on remaining invested and position defensively, without piling into cash.”

Marks said he doesn’t believe a recession is coming anytime soon but shares the concern of central bankers regarding the leveraged loan market which has “overtaken high-yield bonds as the go-to-financing source for speculative grade companies.”  He noted that it’s impossible to predict how much longer the current expansion will last, but that we are at the “tail end” of the cycle.

“Nothing is cheap in our markets and most things are between the high side of fair or the beginning of rich,” Marks said, adding, “However, there are no risks comparable in scale to those on the eve of the financial crisis.” He advises adopting a defensive approach, “while not bailing out of investment completely.”

Marks explained Oaktree’s current approach: “We are endeavoring to be fully invested, but we are doing it with caution. We are not going to cash.”