Dear Lifehacker,I’ve been reading a ton about the stock market hitting more new records.

Nobel Prize winning economists are warning that the market is overvalued.

Does this mean a crash is coming?

What should I do?

That’s the easy part.

Is it going to crashnow?

Well…that, we don’t know.

That makes it a no-brainer to declare it will go down againit always does.

The good news is: it always goes up again, too.

Before we continue, let’s clarify what we mean by a crash.

However, there are a few drops which goes way beyond what we could call “normal.”

Two recent examples were the “dot-com” bust right after 2000 and the 2008 market crash.

The hard part is:whenwill that happen next?

For example, take a look at this chart of the stock market, with the dates stripped away.

It just reached a peak, so is it ready for a crash?

It’s hard to tell.

As it turned out, no.

Here is the same chart continued.

So, don’t let anybody point you to a peak and proclaim that it presages a crash.

They’re playing a game involving math and memory.

I told you the market was going to crash!

you’re free to get my book at Amazon for $24.95."

They might even give a shot to sell you a subscription service at $2,000 a year.

(Hey, if you fall for the book, who knows?

it’s possible for you to’t fault them for trying!)

But the bigger question for you is…

What Should You Do?

Or, don’t do?

Your clue is that first chart.

The market always recovers and reaches a higher peak.

The peak following is the only one lower than the previous peak.

All the other peaks were higher than any preceding peak.

What that means for you is two things:

The market will recover.

It never feels like it when everyone is all doomy and gloomy, but it does.

And then it goes even higher than before.

If you simply keep doing what you did before the crash, you eventually recover and reach higher highs.

How can you tell?

Here is how youdo nottell: the charts you looked at above.

We spend all this time looking at the charts and now they’re not what we should look at?

At least not to determine if the market is overvalued.

But the price of a stock doesn’t tell you if it’s expensive or not.

Let’s take two examples I love using: Apple and Whole Foods Market.

So, does Apple stock have more value?

No, Whole Foods is twice as expensive, even though it’s half the price.

That’s why Whole Foods stock is twice as expensive as Apple’s.

(And you thought only the stuff they sell was expensive.)

The stock market is nothing but the combination of all the stocks trading there.

So, is that high or low?

Now, you tell me: is the market’s PE out of whack at the moment?

I don’t think so, either.

Stock prices are high because companies are reporting high earnings.

Sincerely,Lifehacker

Title image remixed fromJohn T Takai(Shutterstock).