The market seems to be testing new highs by the day. As of Dec. 24, the S&P 500 has delivered a total return of 32.6% in 2013. With past financial bubbles still fresh in investors' minds, there is more than a little anxiety that the market has gotten ahead of itself.
But as of mid-December, the median stock in Morningstar's coverage universe is trading at a modest 2% premium to our fair value estimate. This is a bottom-up measure based on our analysis of the potential of individual businesses to generate future cash flows. Despite the market's steep ascent in 2013, this metric actually hasn't moved much since the beginning of the year, when the median stock was trading right at fair value.
Click here to read our full outlook for the stock market. Plus, see our detailed take on each sector in the reports that follow.
And get Christine Benz's Tips for a Prudent Year-End Portfolio Checkup