He said the corresponding selloff in stocks could be a sign that large investment funds are selling stockholdings to cover losses.

WSJ: Dow's Drop Is Worst Since November

He added that the corresponding selloff in stocks could be a sign that large investment funds are selling stockholdings to cover losses.

WSJ: Stocks Sink

Mr. Stone said he is neutral on U.S. stocks given the year's strong rally, but within the firm's stockholdings he prefers dividend-paying shares.

WSJ: Stocks Pull Back

The problem: People who took money out of their stockholdings to pay down their mortgages missed out on some or all of the stock market's historic rally since 2009.

WSJ: Upside: Pay Off That Mortgage Now!