I believe that the S&P 500 valuations are already stretched. The index is trading at a P/E of 36.5. The mean and median P/E for the S&P 500 index are 15.8 and 14.8 respectively on a historical basis.

Therefore, the positives are largely discounted in the markets. Further, a second wave of coronavirus infections in Europe and a lock-down will impact GDP growth. Cases have surged in the U.S. as well.

I would go overweight on low beta stocks at this point of time. Today, gold and silver also plunged. It makes sense to consider some exposure to precious metals as well.

Markets are not in a bubble. But I would not be surprised with a 10% to 15% correction in the next few months.