Yale Economist Robert Shiller says he thinks stocks are priced to return less than their historical averages, but that they should still be a substantial part of an investor’s portfolio.

“The important thing is that you never get completely in or completely out of stocks,” Shiller tells Business Insider in discussing the 10-year cyclically adjusted P/E ratio, which uses inflation-adjusted earnings over the past decade as a way to value stocks. “The lower CAPE is, as it gradually gets lower, you gradually move more and more in. So taking that lesson now, CAPE is high, but it’s not super high. I think it looks like stocks should be a substantial part of a portfolio.” He says he’s expecting “something like 4 percent real for the stock market, as opposed to 7 or 8 percent historically”, though he doesn’t specify over what period he’s looking.

Shiller also says that investors don’t have to buy the whole market. If the CAPE is high, they can focus on sectors that have lower CAPEs. He’s been working on low-CAPE sector funds with Barclays.