U.S. stocks face a greater-than-usual risk of a sell-off next year, with investors overconfident in an economic resurgence, according to Vanguard Group Inc.'s investment-strategy chief.

"Financial markets run the risk of getting ahead of themselves," Joseph Davis, who also serves as Vanguard's chief economist, said in an interview Friday. He sees 50% odds on a correction in 2020, against what he terms a more typical figure of about 30%.

A correction is often defined as a 10% drop, and the S&P 500 Index hasn't seen one since December 2018, when it came a hair's breadth from entering a bear market -- that is, recording a decline of 20% from the peak.

While this year investors were too pessimistic about recession odds, next year they'll be too optimistic on reflation, Davis said. He also sees a pick-up in U.S. equity volatility from "unsustainably low" levels

"Across the board, expected returns for most strategies are below trailing three-year returns," said Davis. The investment chief estimates that risk assets are pricing in close to 3% U.S. economic growth, an outcome he sees as unlikely.