Buffett Indicator Hits 232% as Investors Urged to Hold 20-Year Strategy
Updated
Updated · The Motley Fool · Aug 8
Buffett Indicator Hits 232% as Investors Urged to Hold 20-Year Strategy
3 articles · Updated · The Motley Fool · Aug 8
Summary
232% on the Buffett indicator and just above 41 on the Shiller CAPE have pushed two closely watched valuation gauges to extreme levels, signaling a broadly overvalued U.S. stock market even as indexes set fresh records.
37% of individual investors are bullish for the next six months, while 38% are bearish, reflecting unease fueled by tech-sector volatility and the risk that elevated valuations eventually trigger a pullback.
20-year S&P 500 holding periods have all produced positive total returns since 1919, according to Crestmont Research, supporting the report's advice to stay invested through downturns rather than try to time a crash.
A $10,000 investment in an S&P 500 fund in August 2006 would be worth about $88,000 today, underscoring the case for owning quality companies with durable advantages over speculative names.