Been seeing a lot of worried takes on the economy lately, and honestly, the data backs up some of those concerns. Recent surveys show a majority of Americans are pretty pessimistic about where things are heading, with a good chunk expecting conditions to get worse over the next year.

Now, I'm not here to doom-post about an inevitable crash, but there are some interesting signals worth paying attention to if you're managing a portfolio. Two major indicators are flashing yellow lights right now.

First up is the Shiller CAPE ratio on the S&P 500. This metric looks at price-to-earnings over a 10-year period adjusted for inflation, and it's basically a way to see if stocks are trading at reasonable prices or if things are getting frothy. Right now it's sitting around 40, which is wild when you think about it. That's the highest we've seen since the dot-com bubble burst over two decades ago. Historically, when this ratio peaks like this, you tend to see pullbacks follow. We saw it spike right before the 2022 downturn too.

Then there's the Buffett indicator, which looks at total U.S. market cap versus GDP. Warren Buffett himself has said when this hits around 200%, you're basically playing with fire. It's currently hovering around 219%. That's actually higher than where it was in late 2021 before the market took a hit.

Here's the thing though: these indicators don't tell you when something will happen. The market could keep grinding higher for months, or a correction could come sooner. That uncertainty is exactly why positioning matters.

The smartest move right now? Focus on quality. If you're holding solid companies with strong fundamentals, you'll have a much easier time weathering whatever comes next. Those businesses tend to hold up better when volatility spikes, and you'll be positioned to benefit when the market eventually rebounds.

Bottom line: market crashes are part of the cycle. The key is making sure your portfolio is built to survive them and come out stronger on the other side.