Buffett Indicator Shows Stock Market is Overvalued
The Buffett Indicator is currently 88% higher than its historical average. It would take a rise in GDP of almost 50% to bring this indicator back to historically normal levels, or a stock market correction of ~30%.
✒ The “Buffett Indicator” shows that the market is currently 88% (2.9 standard deviations) above historical average, suggesting the market is strongly overvalued.
Will this time be any different due to the ultra-low interest rates?
The trend is your friend but history has been known to repeat (or rhyme) itself. This historically high ratio is certainly worth paying attention to.