Warren Buffett's Warning to Wall Street Has Reached Deafening Levels: 4 Things You Should Do Before 2026

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the market's ups and downs.These 10 stocks could mint the next wave of millionaires ›Billionaire investor Warren Buffett is renowned for his discipline on stock valuations. He famously developed what has become known as the Buffett indicator, a simple ratio used to assess the U.S. stock market's value in relation to the country's economic production.Buffett has warned in the past that crossing a ratio of 200% -- meaning stocks, measured by market cap, are worth twice as much as U.S. gross domestic production (GDP) -- is like playing with fire. Today, the Buffett indicator is at a blistering 225%! Alarm bells should be going off with deafening volume.Nobody can predict what might come next, but investors can take some crucial steps to prepare for all scenarios. Here are four things to do right now as we head into 2026.Image source: Getty ImagesThe S&P 500 index has risen by nearly 16% over the past 12 months, and by 77% over the past three years. If it's been a while since you looked at the big picture in your portfolio, now is a great time to see whether stocks or market sectors have grown to outsize portions.You don't have to sell out of your winners entirely, but it's never a bad idea to take some profit on an investment that has grown significantly, especially in a short amount of time. With the Buffett indicator screaming warning signals, the basic goal is to mitigate risk, and cashing in on some of your success during this bull market is part of doing that.Just because the market indexes are near highs doesn't mean that all stocks are. If you do raise some capital or already have funds to deploy, it may be worthwhile to look for high-quality stocks that are currently out of favor. For instance, consumer staples stocks have dramatically lagged the market over the past year. That could mean bargains for some industry leaders within that space.Other times, individual stocks fall for various reasons. Streaming giant Netflix has dropped 30% below its all-time high as drama swirls around its attempted blockbuster acquisition agreement with Warner Bros. Discovery. Stocks and market sectors constantly go in and out of style. Investors can find some fantastic deals on long-term winners if they're willing to look where the crowd isn't.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,929.94 -2.11 (-0.03%)Dow 3048,710.97 -20.19 (-0.04%)Nasdaq23,593.10 -20.21 (-0.09%)Russell 20002,534.35 -13.74 (-0.54%)VIX13.60 +0.13 (+0.97%)Gold4,562.00 +59.20 (+1.31%)Trending tickersBTC-USD Bitcoin USD 87,393.02 -1,441.88 (-1.62%)TGT Target Corporation 99.55 +3.02 (+3.13%)XPEV XPeng Inc. 20.78 +1.21 (+6.18%)ETH-USD Ethereum USD 2,927.14 -39.84 (-1.34%)XRP-USD XRP USD 1.85 -0.02 (-0.93%)PortfolioSign in to access your portfolioSign inTop gainersELPC Companhia Paranaense de Energia 9.65 +0.79 (+8.92%)PSLV Sprott Physical Silver Trust 26.04 +2.08 (+8.68%)ZETA Zeta Global Holdings Corp. 20.70 +1.59 (+8.32%)CPNG Coupang, Inc. 24.27 +1.47 (+6.45%)XPEV XPeng Inc. 20.78 +1.21 (+6.18%)Top losersRGC Regencell Bioscience Holdings Limited 21.16 -3.44 (-13.98%)FLY Firefly Aerospace Inc. 23.34 -3.70 (-13.68%)TMC TMC the metals company Inc. 6.82 -0.80 (-10.50%)AAOI Applied Optoelectronics, Inc. 37.17 -3.83 (-9.34%)RGTI Rigetti Computing, Inc. 22.38 -2.13 (-8.69%)Most activeNVDA NVIDIA Corporation 190.53 +1.92 (+1.02%)TSLA Tesla, Inc. 475.19 -10.21 (-2.10%)PLUG Plug Power Inc. 2.0700 -0.0300 (-1.43%)ONDS Ondas Holdings Inc. 8.48 -0.65 (-7.12%)NIO NIO Inc. 5.10 +0.19 (+3.87%)Top economic eventsEarnings eventsMy earnings eventsEarnings events