Been noticing a lot more people asking if we're heading toward a stock market crash soon. Can't blame them honestly - the sentiment out there is pretty bleak right now.

According to recent data, about 72% of Americans are pessimistic about the economy, and nearly 40% think things will get worse over the next year. That's a lot of negative energy in the market.

Here's what's got me thinking though. Two major valuation metrics are flashing some serious warning signs. The S&P 500 Shiller CAPE ratio - which measures price-to-earnings adjusted for inflation over 10 years - is sitting around 40. That's basically the highest level we've seen since the dot-com bubble burst over 25 years ago. The long-term average is only around 17, so we're talking double the normal range.

Then there's the Buffett indicator. This one compares total U.S. stock market cap to GDP. Right now it's at 219%. Warren Buffett himself said when this ratio hits 200%, you're "playing with fire." We already passed that threshold. Interestingly, this metric also peaked in late 2021 before the 2022 bear market kicked in.

Now, here's the thing - no indicator can tell you exactly when a stock market crash will happen or if one's even coming. Markets don't move on schedules. We could see months of continued growth before any pullback, or volatility could hit sooner. Nobody really knows.

But that doesn't mean you should just sit around waiting. If you're worried about a downturn, the smartest move is to focus on quality. Build your portfolio around solid companies with strong fundamentals. The healthier your underlying holdings are, the better they'll weather any storm. That's how you survive volatile periods and set yourself up for real long-term gains.

The stock market crashing is always a possibility, but being strategic about what you own makes all the difference.