“Valuations and prices need to be judged relative not to the past but to price and valuation of other assets available right now,” writes Zachary Karabell, head of global strategy at Envestnet, in a recent Barron’s article.

Karabell argues that such an approach in today’s environment of both low inflation and paltry interest rates would indicate that “equities overall are quite reasonably priced.” He warns against the approach where fairness of price is determined relative to what investors have paid for a stock in the past. “We don’t buy a home today,” he argues, “and consider it pricey or cheap relative to home prices over the course of the past hundred years.”

In terms of stocks and bonds, he says, “The current matrix indicates that the safest bonds will yield almost nothing in real, inflation-adjusted returns, whereas equities could well yield quite something (with some attendant risk that they may lose quite something).” Although this doesn’t necessarily indicate that equities are a “screaming buy”, Karabell asserts that we now have many equities representing companies that “for the most part, are highly profitable and throwing off some dividends”, and that the conflicting views on the current market is born of uncertainty as much as it is of inflated valuations.

In today’s global yield and rate environment that is “at best, about equivalent to inflation,” Karabell says “it should be difficult to get overly concerned about valuations.”