Stock market capitalisation to GDP ratio now is at historical high. This Is a very strong warning signal of crash. What your view? What should passive investor Investment allocation should be now?

Oohh I drink Orange juice everyday and now its cheaper ?! If I don't buy more then I'm a idiot...

This is a great question. The passive investor asset allocation, by definition, should remain passive! Stock market cap to GDP ratio is affected not only by the rise in markets but sometimes fall in GDP. And returns in markets have always exceeded economic growth on average over very long periods of time. So by definition again, Market Cap/GDP will always be rising. I know many people cite this or a cyclically adjusted P/E (CAPE) or other tools to show that markets are expensive. My experience has been that it is difficult to identify market peaks and bottoms with any degree of accuracy and these valuation tools are never a predictor of returns into the future. I recently held a webinar with Financial Horse on market peaks and I shared my views here, you can watch more of it here!