Speaking to InvestorDaily, MFS Investment Management portfolio manager Ben Kottler said there is a lot of "complacency" among investors at the moment.
Part of the problem, he said, is that many people who work at investment firms have never been through a bear market.
"It has been a decade since the peak of the last bull market, and many [investment firm staff] hadn't started work then," Mr Kottler said.
"Even at firms where you do have more seasoned portfolio managers making the final decision, a lot of the analyst input they're getting is coming from people who've only ever known the good times," he said.
If a portfolio manager realises they have made a mistake and need to sell a stock at the top of a bubble, liquidity can quickly dry up, Mr Kottler said.
"That's a chastening lesson as an investor, and hopefully helps you avoid doing the same thing next time," he said.
"We're at a point now where markets have gone up for a long time. That doesn't in itself mean that the end is nigh. But I think it has bred complacency," Mr Kottler said.
The sheer weight of money being directed into passive ETF products is also a concern, he said.
"What we don't know is to what extent investors in ETFs are aware of the degree to which that they're buying the market or that they're buying a proxy for the market," Mr Kottler said.
"We don't know what would happen to liquidity if they tried to sell. In credit markets there's an awful lot less liquidity in terms of dealer inventory than there has been in the past.
"It worries me, coming from a firm that is all about long-term investing, that many people see ETFs as relatively cheap trading vehicles."
