'Buffett Indicator’ Warns Of Low Long-Term Stock Returns
While the stock market’s recovery since its Q1 disaster is cause for celebration, the downside is stocks are now so expensive it means lousy long-term returns.
How lousy are we talking? Around just 2% per year over the next 10 years, according to the chart called the "Buffett Indicator," Business Insider reports.
Named after billionaire investors Warren Buffett—who calls it his favorite stock market valuation tool—the chart shows the price of the market relative to the GDP.
And according to this, stock prices are more than double their long-term average—something that may give bullish investors pause. [BI]