There are many reasons stocks are falling, from the worries about the condition of the global economy to the unknowable forces that often cause market fluctuations. But beyond those immediate factors, there is also the simple fact that stocks are expensive.

When stocks are expensive — relative to their earnings — they have less margin for error. Small pieces of bad news have the potential to make investors more anxious, because current prices are based on a relatively optimistic view of the world. Such optimism can crumble quickly.

You wouldn’t necessarily know that stocks are very expensive by looking at the most commonly cited version of the price-earnings ratio, which compares the current price of stocks with the earnings of the underlying companies over the past year.

The problem with this measure (which also shows that stocks are somewhat expensive, but not severely so) is that a year isn’t a very long time, as I’ve written before. Judging a company’s long-term future based on the last 12 months puts too much weight on fleeting factors, like the current state of the economy or a company’s latest product.