Stock markets have taken a beating recently, but many companies are in good financial shape, so now may be the time to dive in for some bottom-fishing, right?

Maybe.

But investors should consider that stocks in many good companies may get even cheaper, says Mohamed El-Erian, CEO of Pimco, the world's largest bond fund.

The economy is shedding itself of pre-crisis debt and still has a way to go.

Mohamed El-Erian (Associated Press photo)

"Cheap stocks and corporate bonds can get a lot cheaper before regaining their footing. This is especially true when the combination of too much debt and too little income growth forces a system to de-lever, as is increasingly the case these days," El-Erian writes in a CNBC guest blog.

"Have no doubt, there will be lots of opportunities down the road to buy good companies at cheap prices. If you do so today, you are betting that markets can escape decisively the grips of both bad macro and bad technicals. This is not a call on companies. It is about policymaking in Athens, Berlin, Frankfurt, Rome, and Washington DC."

Debt fears in Europe have sent markets on wild rides, with many fearing that Greece may default and spark a banking crisis that will spread to the U.S.

Retail investors yanked $36 billion out of U.S. stock funds in August, second only to the $47 billion withdrawn from U.S. stock funds at the height of the financial crisis in October 2008 according to preliminary data from the Investment Company Institute, the Associated Press reports.

"The swings themselves have eroded the confidence of investors," says Jeff Kleintop, chief market strategist at LPL Financial, the AP adds.

"It's the sign of a market and an economy not on sound footing."