No matter how volatile stocks are in the short term, valuations always matter eventually. This is especially true during a bear market. When fear and uncertainty are collectively heightened, investors tend to seek out businesses that are profitable on a recurring basis and cheap.

However, "cheap" is a subjective term that can change based on sector and industry, whether we're in a bull or bear market, and what the Federal Reserve is doing regarding its monetary policy.

Likewise, valuation isn't solely determined by the price-to-earnings (P/E) ratio. Although the P/E ratio can be useful for identifying pricey stocks, not all stocks are necessarily expensive when examined in combination with other valuation metrics.

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Source Fool.com