Overview
The Buffett Indicator is the ratio of the total United States stock market to GDP. As of February 3, 2023 the ration is calculated as:
Aggregate US Market Value: $44.5T
Annualized GDP: $26.2T
Buffett Indicator: $44.5T ÷ $26.2T = 170%
This ratio fluctuates over time since the value of the stock market can be very volatile, but GDP tends to grow much more predictably. The average "trend line" value of the ratio is shown below. The current ratio of 170% is approximately 32% (or about 1.0 standard deviations) above the historical trend line, suggesting that the stock market is Overvalued relative to GDP.