likely to be historically overvalued when the market is at or near all-time highs, this is not always the case, and the market is sometimes overvalued even when the market is significantly below all-time highs — valuations can be high even during severe bear markets. Also, the degree of overvaluation or "expensiveness" is crucial. Price-earnings ratios over the long term have been fairly consistent for the stock market as a whole, and when they get way too high (or low), out of line with historical averages, they have always reverted back to the mean eventually. And the higher (or lower) they are, the bigger the correction.

What is always true is that at market tops, just before bear markets start, investors look for justifications for "why this time is different", arguing that something has fundamentally changed such that permanently higher valuation levels now make sense, even with no historical basis for them. Later, in retrospect, those arguments always look silly, but at the time many investors believe them.

I would never encourage someone to pull out of the stock market entirely, but I think it is absolutely rational and smart to shift to a somewhat more defensive position when equities are at historically very expensive levels, unless they are very young and/or have a very long investment horizon. Likewise, when equities are at historically cheap levels, it is smart to shift to a more aggressive position, even if sentiment if very negative (as it often is in those situations). The degree of these shifts would depend on your age, appetite for risk, and many other things, but to do nothing at all when there are tons of red flags is not a good idea either.