Asset prices are elevated everywhere but that doesn't mean investors should avoid the market — they should just be careful, billionaire investor Howard Marks told CNBC on Thursday.
"We're not pulling money out of the markets. We're just applying great caution," the chairman and co-founder of Oaktree Capital said in an interview with "Closing Bell."
That means being fully invested in assets that have been selected with "unusual care."
The market's valuation is thanks to low interest rates from the Federal Reserve, which resulted in investors searching for return in a low-return world, he explained.
Stocks have also soared since President Donald Trump won the election as investors pinned their hopes on his promises of tax reform, deregulation and infrastructure spending.
Marks said there's no question that Trump intends to be a pro-business president, however what he'll ultimately get done is still up in the air.
"My greatest concern is the stock market has been very strong since Election Day, meaning that a lot of optimism has been factored in and I think that every investor should prefer to invest when optimism is low, not high," he said.
Joel Greenblatt, founder and co-chief investment officer at Gotham Asset Management, agrees the market is highly valued.
Historically speaking, the stock market now in the 17th percentile — meaning that equities have been cheaper 83 percent of the time over the past 25 years, he noted.
However, "that doesn't mean we're expecting negative returns," Greenblatt told "Closing Bell."
In fact, he believes there are still places to find value.
"Usually we buy things that if you read the paper, you don't really want to buy. Those fall into health care. Apple has been one of our biggest positions," he said.
While Apple is priced as a hardware company, Greenblatt said he doesn't precisely see it that way thanks to its large ecosystem of products and brand name.
"It's priced, I would say, as one of the cheapest stocks in the large-cap markets, and that shouldn't be."