If a serious sell-off strikes the market, this 'underrated' group should help investors avoid big losses

Stocks may be at all-time highs, but Ally Invest's Lindsey Bell is anticipating market turbulence.

According to the firm's chief investment strategist, surging Covid-19 cases and uncertainty surrounding when the Federal Reserve will meaningfully step away from its easy money policy could propel stocks into a near-term pullback.

To help mitigate potential losses, Bell is encouraging investors to consider adding more health care exposure.

"It really is underrated which is a shame because we're in this great year of innovation with different vaccines and treatments to address the pandemic," she told CNBC's "Trading Nation" on Wednesday. "We remain optimistic that health care can do well especially in periods of angst which may occur over the next couple of months."

For now, it appears Wall Street is breathing a sigh of relief. The Dow and S&P 500 closed at record highs following the highly-anticipated Consumer Price Index data. It showed inflation wasn't as hot as many investors fear.

Right now, Bell believes inflation is transitory, but she indicates it's premature to sound the all-clear.

"I'll take the CPI report today as a win for the transitory camp. But it doesn't mean that we're out of the woods yet," she said. "Time is really going to tell, and I think we could see inflation run a little hotter into the end of the year."

Between inflation, the jump in delta variant case and seasonal headwinds, Bell warns it will be tough for the market to avoid turbulence between now and fall.

"One of the biggest risks continues to be the Fed. We've got the Jackson Hole meeting this month, and there's still a question mark about what the Fed is going to do from a tapering perspective and then when rates will rise," added Bell, a CNBC contributor.

Bell contends health care should be largely immune from potential market fallout because of new innovation and historical performances.

"Those companies have gotten bigger and have improved their cash flow. And, the health care sector overall for long periods of time has easily outperformed the S&P 500," Bell said. "You got to remember it is a sector that provides a nice dividend and has solid cash flow."

The Health Care Select Sector SPDR Fund, which tracks the health care industry, is up 16% so far this year versus 18% for the S&P 500.

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