Markets At Lifetime High: Is It An Investment Opportunity Or A Risk?

I suppose it is tempting, if the only tool you have is hammer, to treat everything as if it were a nail" - Abraham Maslow On 16 January 2023, the Sensex reached its all-time high of 73,427 causing the market-to-GDP ratio, also known as the Buffet Indicator, to climb to 120%.

Essentially, it measures the total stock market capitalization of a country relative to its GDP and is expressed as a percentage. This provides an indication of whether a country's stock market is overvalued or undervalued in relation to the size of its economy. The 10-year average of this ratio is around 87%, suggesting a potential correction or bear market on the horizon. According to this measure, it implies that the market is running ahead while the GDP needs to catch upputting the cart before the horse, so to speak.