WASHINGTON: Several economic indicators, including the Buffett indicator and the Shiller price-earnings ratio, suggest the U.S. stock market is significantly overvalued as of Feb. 2, 2017. As the stock market valuations reach near a 10-year high, the U.S. market expects negative returns in the upcoming years.
A previous article suggested Warren Buffett (Trades, Portfolio) was bullish on stocks at the beginning of 2017. Although the Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) CEO generally had over 50% of its assets in stock equities throughout the past 10 years, Buffett and Charlie Munger (Trades, Portfolio) have reduced their allocations in stocks from a 10-year high of 63% since 2013. Meanwhile, the co-managers increased their cash position from a 10-year low of 20% to its current value of 35%.
