While he thinks that asset prices are “irrationally elevated” Bill Gross, co-chief investment officer at fund giant Pimco, doesn’t see stocks in a major danger zone.

Asked if the stock market is in a bubble, Gross told CNBC, “I don't think so.” Price-earnings ratios are 14 to 15 and 12 on a forward basis, with yields at 2 percent, he explained.

“You can get growth plus yield from global companies at 3 percent-plus. That's not irrational relative to a 10-year Treasury, [which yields] about 1.85 percent,” Gross said.

Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.

He does think that the massive easing program of the Federal Reserve and other central banks has artificially raised asset prices. “At some point we have a pay a piper,” he noted.

But he thinks the Fed can unwind its accommodation smoothly. “I think it ends rationally and temperately,” Gross predicted.

Gross believes the Fed can pull out if its quantitative easing in steps. “The first step would be to reduce quantitative easing from $1 trillion to perhaps $600 billion and then $400 billion and all the way down to zero, perhaps in the next nine to 12 months.

“These are small steps. I was going to call them baby steps, but those are big babies,” he explained.

“The Fed basically is trying to ease its way out of this and produce a normalized economy and normalized market.”

So where should investors go? Gross likes countries with solid economies and balance sheets and high interest rates, such as Mexico and Brazil.

“You can find countries with good balance sheets, decent fiscal situations in terms of low deficits and yet still high growth rates,” he maintained. “I would advise an investor looking for something close to 10 percent to move offshore as opposed to in the United States.”

As for the stock market, many experts think it’s poised for a correction after reaching five-year highs.

“The optimism that got built into the market assumed that things [the economy and earnings] were going to get a lot better,” Bruce McCain, chief investment strategist at Key Private Bank, told The New York Times.

“Truly, things are not getting really good. They are just so-so, as they have been.”

As a result, “everybody is looking for some type of pullback” in stocks, Tim Ghriskey, chief investment officer at Solaris Asset Management, told The Times.

Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.