With the strong rise in the Australian share market over the past month, concern has naturally arisen over whether the market is now overvalued

With the strong rise in the Australian share market over the past month, concern has naturally arisen over whether the market is now overvalued. On some metrics this appears to be the case. But on other measures, the market can either be described as still around fair-value, or decidedly cheap. At 6.3% p.a. the Australian equity market's current forward earnings yield (the forward PE ratio inverted) is notably below its longer-run average of 7.5% p.a. In turn, that reflects the fact the forward PE ratio has lifted to 15.8 p.a., compared with a long-run average of 13.5 p.a.. On this outright basis, the market appears overvalued. For more on this, click the link: (VIEW LINK)