The S 500 (SNPINDEX: ^GSPC) soared 24% in 2023, and investors have bid the benchmark index to multiple record highs this year. Factors contributing to that upward momentum include fading inflation, the resilient economy, a rebound in corporate earnings, and expectations that the Federal Reserve will cut interest rates in the near future. Fascination with artificial intelligence has also sent many stocks higher in recent months.

However, the S 500 now trades at 20.4 times forward earnings estimates, a meaningful premium to the 10-year average of 17.7. As a result, certain Wall Street analysts see a drawdown on the horizon. For instance, JPMorgan Chase has set a target of 4,200 for the S 500, implying about 15% downside from its current level.

Investors wondering whether it's safe to buy stocks in the wake of the market's steep rally should consider this advice from Warren Buffett.

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Source Fool.com