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Buffett Indicator for 2017

January 1, 2017 Buffett Indicator (ratio): 126% according to Gurufocus.com

Market State: Overvalued

Buffett Indicator 2017

First purchase of the account was made at the market open. I purchased 1 share @ $224.85 +$7 commissions. With the Buffett Indicator at 126%, I followed my rule to invest 25% of cash for this purchase as the market is considered to be overvalued.

Prior to the purchase the account sat at just about $900. I was going to add to the account but decided in the grand scheme of things, those $100 are not going to make a difference.

Keep in mind this is a very long term project. As in 15-20 years. The goal is to save and invest. That’s the name of the game and the reason this project exist. 1 share or $1,000 might not seem like much now, but if you continually add to the account, and invest that money, it slowly starts to build up.

How much money do you need to save?

A good rule of thumb is 10% of your income. I will be saving between $50 and $100 a week. It’s an amount that is easily doable by any individuals and something I decided will be fine for this account without affecting my lifestyle.

So how much is $50 a week?

  • $200 a month
  • $600 quarterly
  • $2,4000 annually

Most folks in the U.S. don’t have $1,000 saved up for emergencies, let alone for retirement. I know, it is scary. But it is reality.

 

 

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