Free Tool

Buffett Indicator

Warren Buffett called this ratio "probably the best single measure of where valuations stand at any given moment." Track the total U.S. stock market capitalization relative to GDP and see whether the market is overvalued or undervalued — updated with live Federal Reserve data.

Current Market Valuation

Total Stock Market Cap / GDP

Fetching live data from FRED...

Market Data Breakdown

Key metrics behind the Buffett Indicator calculation

Domestic corporate equities (Fed Z.1, market value) —

U.S. Gross Domestic Product —

Buffett Indicator Ratio —

Valuation Zone —

Market Cap Date —

GDP Date —

Significantly
Undervalued < 230%

Modestly
Undervalued 230–260%

Fair
Valued 260–300%

Modestly
Overvalued 300–340%

Significantly
Overvalued > 340%

How the Buffett Indicator Works

Buffett Indicator = (Total Stock Market Cap / GDP) × 100

In a 2001 Fortune article, Warren Buffett described the ratio of total stock market capitalization to gross domestic product (GDP) as "probably the best single measure of where valuations stand at any given moment."

St. Louis Fed removed Wilshire index data from FRED in June 2024. LIUV now uses the Federal Reserve Z.1 series domestic corporate equities, market value of liabilities (FRED: BOGZ1LM883164105Q, millions USD, quarterly) divided by U.S. GDP (billions USD, SAAR) — both from FRED. The resulting ratio is on a higher scale than legacy Wilshire-based readings.

Valuation bands (for this Z.1 ÷ GDP measure): below 230% suggests deep undervaluation; 260–300% fair value; above 340% elevated. These thresholds are calibrated for the post-2024 data definition, not for historical Wilshire-era percentages.

While no single metric should drive investment decisions, the Buffett Indicator provides valuable context for long-term value investors. It's one of the macro-level signals that LIUV's AI agents monitor continuously alongside company-specific analysis.

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Disclaimer: This tool is provided for educational and informational purposes only and does not constitute financial advice. The Buffett Indicator is one of many market valuation metrics and should not be used in isolation to make investment decisions. Historical zone classifications are based on long-term averages and may not predict future market movements. Data is sourced from the Federal Reserve Economic Data (FRED) database and may be subject to revisions. Always conduct thorough due diligence and consult a qualified financial advisor before making investment decisions. Past performance does not guarantee future results.