“We’ve been experiencing significant market volatility across various sectors including equities, interest rates, and foreign exchange,” Tan Su Shan, CEO of DBS, shared with CNBC, predicting that such fluctuations are likely to persist.

Tan, who assumed leadership of DBS from the long-serving CEO Piyush Gupta in March, highlighted that investors are particularly anxious over the high valuations of artificial intelligence stocks, especially those in the “Magnificent Seven” group.

The “Magnificent Seven” — which includes tech giants like Amazon, Alphabet, Meta, Apple, Microsoft, Nvidia, and Tesla — have been key contributors to Wall Street’s substantial gains in recent years, raising concerns about their escalating valuations.

The Magnificent Seven — Amazon, Alphabet, Meta, Apple, Microsoft, Nvidia and Tesla — are some of the major U.S. tech and growth stocks that have driven much of Wall Street’s gains in recent years.

“You’ve got trillions of dollars tied up in seven stocks, for example. So it’s inevitable, with that kind of concentration, that there will be a worry about. ‘You know, when will this bubble burst?’”

Earlier this week, at the Global Financial Leaders’ Investment Summit in Hong Kong,  it was likely there would be a 10%-20% drawdown over the next 12 to 24 months.

Morgan Stanley CEO Ted Pick said at the same summit that investors should welcome periodic pullbacks, calling them healthy developments rather than signs of crisis.

Tan agreed. “Frankly, a correction will be healthy,” she said.

Recent examples include Advanced Micro Devices and Palantir, both of which posted stronger-than-expected quarterly results on Tuesday, yet their shares — and the wider Nasdaq — fell.

Her remarks follow similar warnings by the International Monetary Fund and central bank chiefs Jerome Powell and Andrew Bailey, who have all cautioned about inflated stock prices.

Tan advised investors to diversify rather than concentrate holdings in one market. “Whether it’s in your portfolio, in your supply chain, or in your demand distribution, just diversify.”

Tan, who has over 35 years of experience in banking and wealth management, noted that Asia could attract more investment from the U.S.—and that it’s not a bad thing.

Singling out Singapore and the country’s central bank’s efforts to boost interest in the local markets, Tan described the city-state as a “diversifier market.”

“We’ve got rule of law. We’re a transparent, open financial system and stable politically. We’re a good place to invest…. So I don’t think we’re a bad place to think about diversifying your investments.”