U.S. equities, not as good a value as they have been historically, are still worth owning, Yale University finance professor Robert Shiller said Friday on CNBC.
"I think contrary to a lot of people that the market is highly priced, but even so it's a good investment," he said. "Compared with other investments, it should be a substantial part of one's portfolio."
On "Fast Money," Shiller noted that long-term bond yields were near record lows.
Buying stocks on dips would be advisable, he added, although Shiller also said that he wasn't adding to his positions.
"I'm not planning to, but I'm not managing a professional portfolio," he said. "If I were, I might – yeah, I might think of doing that."
Japanese equities, Shiller also said, had been too expensive for the past 20 years.
"They're still at a very high price-to-earnings ratio," he said.
Shiller, one of the foremost experts on the U.S. housing market and coauthor of the widely respected Case-Shiller Report on housing prices, noted activity in real estate.
"It could be back," he said, adding, "I think the market is very volatile because it's gotten very speculative."
Shiller noted that institutional investors buying single-family homes was a recent development, but added that the speculative trend has been on the upswing.
"For 50 years now, it's getting more and more speculative," he said. "But remember speculative means down as well as up. I think there's a substantial probability of future losses as well."
Trader disclosure: On April 5, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Mike Murphy is long BAC; Mike Murphy is long AAPL; Mike Murphy is long JCP; Mike Murphy is long SDS; Jon Najarian is long PWE CALLS; Jon Najarian is short ZNGA puts; Jon Najarian is long EEM puts; Jon Najarian is short EEM; Jon Najarian is long VXX Calls; Jon Najarian is short VXX puts; Dan Nathan is short QQQ; Dan Nathan is short SPY; Dan Nathan is long SPY APR 153/148 PUT SPREAD; Dan Nathan is long GS MAY 145/135 PUT SPREAD; Dan Nathan is long FB APR. 12 WEEKLY 26/25 PUT SPREAD; Dan Nathan is long MSFT APR 28 PUTS; Dan Nathan is long AMZN APR 240/200/160 PUT FLY.