Thanks to Trump's failure to get healthcare legislation passed, it has exposed a key tenet to investing that most people have forgotten about since the guy's election. 

Valuations on companies matter. What we witnessed over the last week in the markets (including on Monday when the Dow Jones Industrial Average capped an eight-day slide) -- an increase in skepticism after a strong rally -- has shed light on stock prices that have simply gotten ahead of themselves. In large part, that's due to stock prices being fueled more by multiple expansion than a ramp in corporate earnings growth.

Investors have been willing to pay more to own buildings materials plays such as Vulcan Materials (VMC) - Get Report and tech kings Facebook (FB) - Get Report and Apple (AAPL) - Get Report  on hope rather than substance. Hope that Trump cuts corporate and individual taxes. Hope that Trump ushers in a tax holiday for companies that could have them spend more on acquisitions, stock buybacks and dividends. The guy has truly got nothing done so far (other than firing off some epic tweets), and now there is talk of him already be a somewhat lame-duck president. Hence, the hope is starting to be removed from stock prices. 

And deservedly so. 

The total U.S. stock market is now valued at more than 150% of annual gross domestic product, according to the Federal Reserve Bank of St. Louis. That is notably above historic norms, and roughly in line with the peak market euphoria of the 2000 tech boom. Meanwhile, the cyclically adjusted price-to-earnings ratio of 30x is almost 2x the historical average. Another sign of froth has been the rotation into ETFs -- these instruments have become a big seller among the dumb money looking for the diversity of a mutual fund with the potential for more outsized returns. Equity ETFs purchased $266.4 billion over the last five quarters, with their fourth-quarter purchases marking a record $485.4 billion, points out Yardeni Research. 

"We may be witnessing the beginning of an ETF-led melt-up, which may simply reflect individual investors pouring money into passive stock index funds," Yardeni says. "In this case, valuation multiples would lead the melt-up, until something happens to scare investors out of those passive funds, which could trigger either a correction or a nasty meltdown."

To answer the question on all your minds right now: do I sell or wait this out. The market is signaling strongly that you sell winners and rotate into something with perceived greater safety (such as gold). It may be time to heed the market's new messages, just like you did back in December when the market really kicked into high gear. 

Read This or You Lose Out

Speaking of excess: Silicon Valley now boasts more than 76,000 millionaires and billionaires, and individual giving has risen from $1.9 billion to $4.8 billion between 2008 and 2013, a 150% increase, reports the San Francisco Chronicle. Unfortunately, it doesn't appear these wealthy tech titans are investing in the poor locals, says the Chronicle. Absurd. 

Amazon continues to think of ways to dismantle rivals:Amazon (AMZN) - Get Report is looking to open stores to sell furniture and home appliances, reports the New York Times. Can't be surprised by any of this, as the company will need some form of store fleet to walk consumers through increasingly complex tech gadgets. Look for shares of Best Buy (BBY) - Get Report , Sears Holdings Corp. (SHLD) , J.C. Penney (JCP) - Get Report and La-Z-Boy (LZB) - Get Report (to name a few) to be active on this report on Monday amid fears of Amazon's arrival. 

Meanwhile, Amazon has secretly opened tiny stores across the country, TheStreetreports

There are some key market moves happening: Amid the increased volatility in the market, investors have flocked to gold while also dumping the dollar. Gold rallied about 1% on Monday -- and is now hovering around $1,259 an ounce, or a one-month high. The U.S. dollar, meantime, is at a four-month low.

TheStreet Recommends

BMW just made one really smart car:TheStreet had the opportunity to take a new high-tech BMW out for a spin over the course of three days. By far, it was the smartest car we have ever tested. One interesting feature: The luxury auto automatically put us back in the lane anytime we swerved out of it. Hello autonomous driving.  

This article originally appeared at 09:00 ET on Real Money on Mar. 27, our premium site for active traders. Click here to get great columns like this from Brian Sozzi and other writers even earlier in the trading day.

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