Yale Economist and Nobel laureate Robert Shiller encourages savvy investors to scale back on equity holdings now because the raging bull stock market is very overpriced.

The cyclically adjusted price-earnings (CAPE) ratio developed by Shiller shows a hefty overvaluation, CNBC explained.

The ratio, which compares current prices to average earnings over the past 10 years adjusted for inflation, is higher than it's been since 2002.

However, Shiller "is not suggesting, necessarily, any imminent disaster" in the market.

"My general thought is that I think it's quite reasonable to have an investment in U.S. stocks as part of a diversified portfolio," Shiller told CNBC. "Just don't go overboard on it."

Major Wall Street indexes have rallied to record levels since the election of Trump as U.S. president, boosted by pledges of tax reforms, reduced regulations and increased infrastructure spending, Reuters reported.

The benchmark S&P 500 has surged 10 percent since Trump's Nov. 8 election, with optimism running high over the Republican administration's domestic proposals, including plans to reform taxes paid by businesses.

But there have been few specifics so far, and some investors believe Trump may need to provide more than just generalities when he gives his first major presidential address on Tuesday to Congress.

"If he comes out next week and there are little or no details other than that it is going to be great, that is going to be a time where we could have the first sort of crack in the armor," JJ Kinahan, chief market strategist at TD Ameritrade in Chicago, told Reuters.

Trump has said enough so far to help propel major stock indexes to all-time highs. The Dow Jones Industrial Average this week marked its longest run of consecutive record-high closing prices in 30 years.

With stock valuations expensive, many market participants are bracing for a pullback. The S&P 500 is trading at nearly 18 times forward earnings estimates versus the long-term average of 15 times, according to Thomson Reuters data.

However, another respected economic guru has urged investors to keep the faith and don't abandon the Trump stock rally.

Veteran financial guru and former Ronald Reagan adviser Larry Kudlow told Newsmax TV that the bull stock market raging since Donald Trump’s victory is far from over.

“I'd stay with the Trump bull market,” he told “America Talks Live."

“But remember this, behind the Trump bull market is an unexpected surge in corporate profits, which is the mother's milk of stocks,” the Newsmax Finance Insider told host Steve Malzberg.

" I think the foundation from rising profits is great and I think the expectations of Trump getting his pro-growth tax cut plan is great," Kudlow said.

(Newsmax wire services contributed to this report).