Nobel Prize-winning economist Robert Shiller believes the fear of missing out is fading.
According to Shiller, the market phenomenon was the major narrative driving the historic rally off the March 23 low — as the world entered the throes of the coronavirus pandemic.
But with big gains in the rearview mirror, Shiller isn't turning bearish.
"The market is highly priced, but it's not so high that I wouldn't consider it as an investment," the behavioral economics expert told CNBC's "Trading Nation" on Tuesday.
Shiller cites a turning point in the economy as vaccine optimism soars.
"If the vaccine works, we've made a fundamental change," the Yale University professor said. "It's not just a psychological change."
He expects work-from-home roles will become vastly more acceptable even as Covid-19 restrictions are lifted. Shiller speculates the impact will curb demand for activities such as restaurant meals on the go and items like automobiles. Meanwhile, the migration would likely support some of 2020's biggest technology momentum plays.
However, Shiller, who wrote the 2019 book "Narrative Economics: How Stories Go Viral and Drive Major Economic Events," is concerned about the collective level of optimism surrounding how quickly a vaccine will return life to normal.
"They're expecting miracles from the vaccine," said Shiller, who predicts virus fears will linger for at least another year.
Yet, it may not weigh too heavily on stocks. Even though Shiller emphasizes it's difficult to predict the market's direction during such an unprecedented time in history, he believes the market has gotten past the extreme fear from March and April.
"They were talking about a Great Depression. That was an important narrative," Shiller said.