"It may not happen until the summer or fall. The question is: Will it be retroactive? I think it will be retroactive," he added.

The historical gains could just be beginning.

"As soon as Trump won, the markets started to rethink whether he was bullish or bearish, and very quickly concluded he was bullish because of his economic program. Not only that, he came in with a majority in both houses of Congress which increases the chances they'll get his tax cuts passed," said Yardeni.

"I think it's a good bet," he said. "I think we shouldn't underestimate how radical this change is going to be," he said.

To make the most of potential market gains in 2017, Yardeni recommends stocks in the consumer discretionary and financial services areas.

"Financials have had a great move, but they were extremely disliked — hated even. And, they were big laggards," he said.

"I think there is still more room in the financials. I could see the ten-year bond yield getting to three percent next year," said Yardeni.

"A three percent bond yield certainly would indicate a stronger economy and that would mean the yield curve would continue to steepen. And a steepening yield curve is usually a sign of better growth and it's great for the financials," he added.

Dr. Ed Yardeni is the President of Yardeni Research, Inc., a provider of independent global investment strategy research.