Elevated Equity Valuations Demand Discipline in a Momentum-Driven Market

Built on insights from MFS strategists, the analysis outlines why valuation remains a decisive force in long-term equity investing.

• Record-high U.S. valuations, amplified by AI enthusiasm and liquidity tailwinds, narrow the margin for error and heighten the need for selectivity.

• Household equity ownership and stretched valuation metrics suggest conditions where even modest earnings disappointments could pressure returns.

• Disciplined, forward-looking valuation work—especially in high-growth and concentrated sectors—helps investors distinguish durable value from sentiment-driven price action.

To explore how valuation frameworks can guide positioning amid today’s extremes, the full report provides a detailed perspective.