Global stock markets may look stretched by traditional valuation measures, but Schroders argues that investors are underestimating the structural forces that could keep prices elevated—and even push them higher.
In its 2026 global equities outlook, the U.K.-based asset manager acknowledges that almost all major markets are trading at multiples well above their 15-year medians. Long-term gauges such as the cyclically adjusted price-to-earnings ratio (CAPE) and the market-cap-to-GDP measure, often cited by Warren Buffett, are flashing red, Chief Investment Officer Alex Tedder said in the report. Historically, such signals have preceded mean reversion and downside risk.
