After the last few years of extreme valuations and extreme valuation compression, “fair value” has gotten lost, leaving a lot of investors adrift when it comes to figuring out how much to pay for stocks on both sides of the value/growth divide. Here are the benchmarks I use.

Over the past 10 years, the S&P 500 has commanded an average valuation of 17.6X forward earnings expectations. While appetite for stocks swings higher and lower depending on the mood, the economy and the rate environment, I consider that average level to be fair value for the market as a whole.

And by that, I mean that if you pay 17.6X forward earnings, you probably won’t make money or lose it in the near term. That’s a holding level. I wouldn’t sell it and I wouldn’t go out of my way to buy it either.

I would definitely think twice before I buy the market here at a 19.3X multiple. This is rich. If you enter here, you’ll need to wait at least a year for new guidance to raise the earnings bar.

Even then, we’re in a precarious place. In absolute terms, we’re a long way from “hold” and even fairly far into the outright “sell” zone.

However, faster imminent growth normally commands a premium price, right? The S&P 500 is indeed on track to give us 11% earnings expansion in the coming year, which is significantly above trend.

Adjusted for growth, the real “hold” level (fair value) is more like 27X earnings . . . for the immediate future. As long as earnings keep expanding at this rate, that’s as good as we should expect it to get.

With that in mind, a year from now SPY might soar at least briefly beyond 640. After all, the Fed will be cutting rates, which the bond market will love. The yield curve will heal. A lot of the arguments for a severe recession on the horizon will evaporate.

Remember 2013? That’s what that kind of exuberance feels like after an extended period of economic turmoil. It’s the market getting back on track.

But what we need to pull that off is simple. Growth needs to come in above trend in the coming year. That means a headline number well above 7.2% for the S&P 500 as a whole. And the higher the number gets, the farther the bulls can run.

Some benchmarks might be useful. If the S&P 500 gives us 8% growth, I’d consider it fairly valued at this level relative to that growth rate. Anything less means the market as a whole is still trading ahead of itself . . . precarious territory.

In that scenario, I’d hang onto the typical stock but I wouldn’t be doing a lot of buying here.

And of course individual sectors and individual stocks have their own growth rates and their own “fair value” levels. Some are worth a premium price relative to the market as a whole. Some are cheap.

But not many are cheap. If the thought of the market trading at 17X (much less 19X or 27X) scares you, you’re unlikely to find compelling value out there. Growth, on the other hand, can work miracles.