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I'm bullish, but ..., financial advisor Michael Farr says

Markets are too built up on the future of the United States when policy uncertainty and slow economic growth are still key points of concern, financial advisor Michael Farr said Friday.

"I'm positive. I'm bullish on the future of America," the CEO and founder of Farr, Miller & Washington told CNBC's "Worldwide Exchange." "But I think we're pricing the future of America a little bit high today with as much uncertainty as we have."

Farr acknowledged that unemployment is low, wages are creeping up and market sentiment is improving — all traditional causes for optimism. But the long-running bull market could take a turn, he said.

"It's not bad, but we haven't had a pullback for what, seven years? I mean, markets could go down," Farr said. "Could this thing drop 2,000 points? Sure. Could it go up 2,000 points? Sure. But you better be careful and have a seat when the music stops."

Farr said his caution stems from watching markets rallying mostly on expectations rather than fundamental changes.

"No tax reform yet, no repatriation of money, and earnings are still creeping along," Farr noted.

"The increase in prices has been really driven by ... expectations of moves by the Trump administration and the Congress, and my point has been it's going to take a while for these things to go," he continued.

The Federal Reserve's rate hike forecast is also driving stocks to new highs, as economic conditions improve, but the central bank's unsteady future is yet another source of concern, Farr said.

"Maybe one of the biggest stories for the year ... is the uncertainty of what's going to happen to this Fed and these three new appointments, and how it could shift the color and face of monetary policy," Farr said, referring to the upcoming departures of three Fed officials.

But Farr said politics is clouding investors' views of the underlying market drivers, making it difficult to gauge the sustainability of these levels.

"After the press conference yesterday with President Trump, there are so many distractions that are hitting media and investors. It's really tough to figure out which fundamentals are driving anything in the near term," he said.

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