The analysis needs to factor overall market earnings [1]. It is more level-headed to look at the S&P 500 P/E ratio, which does show a historically over-valued m

The analysis needs to factor overall market earnings [1]. It is more level-headed to look at the S&P 500 P/E ratio, which does show a historically over-valued market, though not dramatically over-valued at this time [2]. S&P 500 overall earnings hit all-time highs in 2013 and 2014, but have fallen back somewhat in 2015. So it's a pretty safe bet to short, if that is one of your investment tools. But I don't think you'll really make a killing, unless earnings decline substantially. I've chosen to just divest stock-based investments and increase cash somewhat, and then cherry-pick value in dividend stocks. [1] http://www.multpl.com/s-p-500-earnings/table http://www.multpl.com/s-p-500-earnings/table [2] http://www.multpl.com/ http://www.multpl.com/