Maybe start saving your money for 2025?
The Buffett Indicator is a stock market valuation metric that compares the total market capitalization (market cap) of a country’s stock market to its Gross Domestic Product (GDP). It was popularized by Warren Buffett as a way to gauge whether the stock market is overvalued or undervalued.
Formula:
How It’s Useful:
- Market Valuation Indicator – If the ratio is above 100%, stocks may be overvalued. If below 100%, they may be undervalued.
- Predicting Market Corrections – A very high Buffett Indicator (e.g., over 150%) has historically preceded market crashes (e.g., the Dot-Com Bubble).
- Long-Term Investment Insights – Helps investors assess whether the market is in a bubble, fairly valued, or undervalued.
*Currently in 2025 Canada’s Buffet Indicator Ratio is almost 200% 😧*
Click HERE for one of the best financial blogs of the internet