The current market is at valuation levels that have only provided satisfactory returns in the past decade, when valuation levels reached all time highs. The question long term investors must ask themselves is "has the past decade been an anomaly or is it the new normal"? Will buying at well above average valuation levels lead to satisfactory returns this time around?
The case for a new normal is that this trend of higher valuations has persisted for so long that it is becoming hard to call it an aberration. I would argue that nothing has changed, except for unprecedented government intervention. However, this intervention is suffering from the law of diminishing returns. Each time the cheap money is having less and less of an effect as there is more old debt that needs to be serviced. And the side effects have been growing.
Even though I don't believe we will see a full blown bubble like 1999 and 2007. I have been hesitant to become net short. Call it battered wife syndrome for a bear, as I took a severe beating on the short side a few weeks back. However, I am still looking for an entry point. Just being very careful about it.