Public markets have rewarded investors handsomely over the past 15 years. Strong earnings, dominant technology companies and abundant liquidity helped drive stocks steadily higher.

That run has also pushed valuations to historically demanding levels. U.S. stocks are now more expensive relative to the economy than they were during the dot-com bubble or the 2021 market peak. Based on Federal Reserve data, Ascentis Asset Management estimates that U.S. corporate equities are worth about 230% of GDP and sit 2.6 standard deviations above their long-term trend.

For advisors, that raises a tougher question: How much of the next decade’s growth is already reflected in current prices?

What High Starting Valuations Have Meant

Valuations this high…