David Sterman

"Risk-on" and risk-off" are remarkably straightforward notions. When investors are bullish, they increasingly migrate into ever-riskier stocks, either ones that sport higher valuations, or ones that are small but potentially quite promising. Yet after a six-month stock market rebound, the "risk-on" trade may be wearing off. And if markets pull back, get ready for the "risk-off" trade (also known as a "flight to quality"), where investors shift funds back into assets that are most likely to preserve capital.

Right now, a number of stocks in the S&P 500 have moved into nosebleed territory in terms of projected 2013 price-to-earnings (P/E) ratios. Here are the 10 most richly-valued stocks in the S&P 500...

In their favor, at least some of these companies can back up their lofty valuations with robust profit growth. For example, Amazon.com (NASDAQ: AMZN), Crown Castle (NYSE: CCI) and Host Hotels (NYSE: HST) are all expected to boost profits at least 25% in 2013.

Yet for many other high P/E stocks, it's simply hard to fathom why investors think they deserve such a large multiple.

David Sterman

David Sterman has worked as an investment analyst for nearly two decades. He is currently an analyst for StreetAuthority.com