Warren Buffett's top investing advice is still valid but the S&P 500 is 'the worst thing to own' in the near term, says top US stock strategist

• Investors should avoid the S&P 500 in the short term, according to the head of US equity and quantitative strategy at BofA Securities.
• "If you're thinking about what's going to happen between now and let's say the next 12 months, I don't think the bottom is in," Savita Subramanian told CNBC.

The S&P 500 is the "worst thing to own" in the current high-inflation environment, unless investors have a long-term outlook, according to Bank of America Securities head of US equity and quantitative strategy.

Renowned billionaire Warren Buffet has often preached that average retail investors should buy and hold an index fund tracking the S&P 500.

"If you've got a 10-year time horizon, hold the S&P 500 and watch and wait. Returns are probably going to be in the mid-single digits for the next 10 years," Savita Subramanian told CNBC on Tuesday. "But if you're thinking about what's going to happen between now and let's say the next 12 months, I don't think the bottom is in."

She added that she likes the Buffett strategy of buying and holding, but not everybody is looking 10 years out.

In the short term, there is better value to be found outside of the S&P 500, pointing out that small-cap stock benchmarks are pricing a much deeper recession than she expects.

The US economy could even benefit from what appears to be the beginnings of a capital expenditure cycle, Subramanian said.

"The S&P 500 right now is expensive — it's super crowded. It's the most crowded ticker in the world if you think about it from an index perspective," she said, adding that "while it might do well over the next 10 years, I do think that there is some crowding risk [and] some potential for investors to have to sell the S&P."