Market Valuation November 2025

Markets have continued to maintain above average returns in 2025, with the S&P 500 notching a 14.66% YTD. In the last 5 years, the S&P is up over 80%, marking a historic period for the stock market.

However this does not come without risk. The "Buffet indicator," a ratio that measures stock market to valuation to GDP, sits at around 220% of GDP. This is a level that Warren Buffet himself denotes as "playing with fire." To put this into perspective, at the peak of the dot com bubble, this indicator was at 100%.

To put it simply, equities are expensive and do present possible downside risk. However, this does not mean markets should be avoided.

Marston Financial Group shifts its portfolio in periods of heightened equities to investments called "special situations." These special situations involve involved investments which are not typically affected by market swings.

Alan Greenspan once noted that individuals exhibit "irrational exuberance" during periods of market booms. In the opinion, of MFG cooler heads will succeed in the end.

-- Editors of Marston Financial Group 11/9/2025