While many conservatives complain that the Federal Reserve has left interest rates too low for too long, former General Electric CEO Jack Welch begs to differ.

He thinks the Fed should hold off on raising rates for now, because of the economy's fragility and the dollar's strength.

The central bank has kept its federal funds rate target at a record low of zero to 0.25 percent since December 2008. Many economists expect it will begin increasing rates in September.

"I understand we could be misallocating funds and putting more and more people into risk assets" with the Fed's low rate policy, Welch tells CNBC.

But, "I worry about the fact the economy is not that strong." And he worries that the dollar is strong. The greenback has risen to multi-year highs against a range of currencies in recent weeks.

A rising dollar hurts the economy by making our exports more expensive in foreign currency terms and making corporate revenue earned overseas worth less when converted into dollars.

"Every dollar of exports we lose from our companies here is troublesome," Welch notes. "It could crater us. I worry about the dollar breaking parity going below the euro." The euro traded at $1.0731 Thursday.

"[European] companies are going to kick butt all over the world against our guys," Welch maintains.

And how should investors deal with the dollar's ascent?

"In positioning for renewed dollar strength, it may be best to resist the temptation of big trades," Mohamed El-Erian, chief economic adviser at Allianz, writes in an article for the Financial Times.

"A superior approach would be to maintain larger cash balances while also exploiting relative price movements and highly differentiated positioning within asset classes."

And what positions should we take?

"That means combining exposures that favor the dollar versus other major currencies (particularly the euro) with hedged European versus U.S. equities positioning and, on the government bond side, U.S. bonds versus German Bunds."

Many experts says European stocks offer more attractive valuations than those in the United States. The S&P 500 index carried a trailing price-earnings ratio of 20.47 Friday, up from 17.61 a year ago, according to Birinyi Associates.

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