By Steve Blumenthal, CEO, CMG Capital Management Group
I highlighted three valuation measures earlier this month Click Here: one based on reported earnings through 12-31-2014, one based on operating revenue, and Warren Buffett’s favorite valuation indicator Stock Market Capitalization as a Percentage of Gross Domestic Income. The market is expensively priced. The problem is that when valuations are high, the probable forward returns are low. This doesn’t mean the U.S. equity market can’t go higher from here; but it does mean that risk is much higher.