With the S 500 up more than 18% this year, it's getting very close to surpassing its previous high, which is about 5% above current levels. When that happens, we'll be back in a bull market. On average, valuations are just getting back to normal. The S 500's price-to-earnings ratio stands at 23 right now, which is a typical pre-pandemic valuation.

Still, some stocks do look a bit overvalued at this point even though the underlying companies have some wonderful businesses. Three in that category right now are (NYSE: SHOP), MercadoLibre (NASDAQ: MELI), and Nu Holdings (NYSE: NU). In the event of a market pullback, you'll want to load up on these stocks.

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Source Fool.com