Hi there,
I don't have a black and white view on the markets - never do. The truth usually lies somewhere in the middle.
Certainly, I felt as though market optimism was a little stretched given we are till a long ways away from returning to pre-pandemic economic activity. That being said, while some will take a couple of years to fully return to 2019 levels, orthers are still growing and benefiting in a big way.
Furthermore, there are more retail investors now more than ever and many new ones, with smaller cash to invest are chasing after penny stocks in a hope to strike it rich. The recent downtrend is hitting growth stocks as a good number of them have benefit from irrational buying. That doesn't mean ALL growth stocks are overvalued. That is what I mean when i say, I don't have a black and white view.
Between 2010 and the covid crash, there were countless articles calling for a crash and saying the markets were overvalued. If you sat on the sidelines during this time and you would have missed out on significant gains. In my opinion, so long as you invest in good companies and with good fundamentals - investors will be just fine and be able to ride out any volatility.
Also worth noting - P/E is not a great indicator in of itself especially today. Why? because most are inflated because of lower earnings due to the pandemic. Those will eventually normalize. That is why you need to expand beyond just P/E of a stock and look at the big picture Forward P/E, PEG, P/S, P/CF, EV/EBITDA, against historical averages, industry averages, etc.
Bottom line, you can find stuff to invest in at any time and research has shown that it is best to be in the market than out of the market.
Mat