Warren Buffett's Favorite Stock Valuation Gauge Just Hit an All-Time High. What Should Investors Do?

Group 1 - The Warren Buffett indicator has surpassed 200%, indicating that stocks are expensive relative to the economy, with an average of about 85% since 1970 [1][7] - The current stock market composition is significantly different from past decades, with tech giants dominating and being less tied to economic cycles [2][3] - Companies like Apple, Microsoft, Alphabet, and Nvidia are capital-light and benefiting from artificial intelligence, which is reshaping their operations and driving growth [3] Group 2 - Despite concerns over stock valuations, a dollar-cost-averaging strategy is recommended for investors to build wealth over time [4][7] - The Vanguard S&P 500 ETF is highlighted as a core holding for investors, tracking the performance of the S&P 500 index, which consists of the largest U.S. companies [6]