Price-to-earnings ratio — Often referred to as P/E ratio, this reflects the price of a company’s shares relative to its earnings. A high P/E ratio could mean that a company is overvalued.
Shiller CAPE Ratio — The cyclically adjusted price-to-earnings ratio (CAPE) divides a company’s stock price by the average of its earnings for the last 10 years, adjusted for inflation. It helps assess the company’s valuation over different periods of an economic cycle.
Buffett Indicator — Named after legendary investor Warren Buffett, who describes it as “the best single measure of where valuation stands at any given moment”. It measures the ratio of total US stock market valuation to US GDP. A high ratio signals an overvalued market.
CBOE Volatility Index (VIX) — Often popularly referred to as the fear gauge, the Chicago Board Options Exchange (CBOE) index measures the level of expected volatility in the markets. A high level can indicate that bears are beginning to dominate a bull market and a pullback may be on its way.