In a recent Barron’s article in which he describes the current U.S. economic expansion as an “Indian summer”, JPMorgan chief strategist David Kelly says that investors should guard against being “overly enthusiastic about overvalued assets” at this late stage in the cycle.

Despite human hardship, Kelly points out, the rebuilding necessitated by recent natural disasters will be a positive from an economic standpoint, and potential tax cuts could be a boost going forward. Earnings and GDP growth should continue in the short term, Kelly says, but both could slow by the second half of next year. He argues that, without significant increases in the labor force and improvements in productivity, “3% growth cannot be sustained.”

Low economic and market volatility, writes Kelly, may be lulling investors into complacency, suggesting that this might be a time for preparation for tougher times ahead. While he says this isn’t a time for investors to panic, he adds, “It is, however, a reason to turn off the ‘auto-pilot’ and be more thoughtful about investing. Within the U.S., an Indian summer probably still means being overweight equities and underweight fixed income. However, in both cases it means paying close attention to valuations and emphasizing those sector that should fare best in a rising rate environment.”