#MarketRebound MarketRebound

U.S. stock valuation remains concern as investors rush back in

Valuation in the S&P 500 remains a primary concern for experts who say this is a good time to make sure a portfolio is properly diversified. According to Schassler, with the recovery in stocks, the U.S. market is "priced richly."

He added that even as recession risks have declined after the U.S.-China temporary trade truce, the risks remain higher than the historical baseline. "We're not calling a recession, but risk is high," he said on "ETF Edge."

The price to earnings ratio in U.S. stocks reinforces the message that there is "lots of value overseas," he added.

In Schassler's view, the big shift in U.S. government policy on a global basis is also a secondary catalyst for more diversification. As the world becomes more bifurcated, and countries are forced to move forward on their own and push their own growth, investors are in a backdrop that favors more growth from lower valuation international stock markets, he said.

Todd Rosenbluth, head of research at VettaFi, said on "ETF Edge" that this year has shown more investors embracing international diversification, though he added that we are "not fully seeing it" in the market yet. He also says investors should use this moment to be mindful of the concentration within their U.S. stock holdings.

"The flows have certainly been favoring the U.S. and investors been buying the dip are being rewarded," Rosenbluth said. "We've seen growth equities rebound much more strongly, those tech and consumer discretionary oriented sectors," he said.

The iShares S&P 500 Growth ETF (IVW) is up nearly 18% in the past month, while the iShares S&P 500 Value ETF (IVE) is up about 8%, according to ETF Action.

IVW has a P/E ratio above 33, compared to a