Are Markets a Buy Yet?

May 4, 2022

The Buffett Indicator is the ratio of total US stock market capitalization to Gross Domestic Product. Its namesake Warren Buffett has called the ratio “the best single measure of where valuations stand at any given moment”. Roughly speaking, if the ratio is below 85%, markets are undervalued; between 85% and 115%, fairly valued; and over 115%, overvalued. The current reading (4/29/22): 170%.

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