Reuters - The bar is still open, but last orders may be near.

Like festive season revellers, investors who lapped up gains in developed market equities of up to 30 percent this year may be tempted by one last tipple. Yet there's a gnawing feeling throughout new year forecasts that now may be the wisest time to sober up.

Few genuinely believe stock markets have got over-excited just yet, even if the question litters annual outlooks for the year ahead. If anything, the excess is in bonds and they are buoyed for now by the likely continuance of central bank largesse keeping interest rates near zero.

But however you read the outlook for the Federal Reserve or Bank of England, the party for U.S. or British equities may be about to wind down anyway.

"The clock is ticking for risk assets," wrote Barclays global head of research Larry Kantor this week, seeing profit margins peaking and equity valuations versus bonds shrinking.

Blackrock strategist Ewen Cameron-Watt talked of squeezing the last remaining juice from equities and higher-yielding securities. But he too warned that "investors should be ready to discard the fruit when it starts running dry."

ABN Amro Private Banking said it was happy to stay overweight equities generally right now. But its Chief Investment Officer Didier Duret added: "Conditions support portfolio diversification to reduce risk."

The irony of course is that these nagging notes of caution come at a time when recovery is finally spreading through the economies of the United States and Britain.

Yet equities have frontloaded that sustained pickup in both domestic and global growth for some four years now. The S&P500 index of top U.S. stocks has almost trebled since the trough of 2009. Britain's FTSE 100 has almost doubled.

The upshot is that most western bourses are no longer cheap when various cuts of forward price/earnings multiples are measured against historical averages.

Neither are they ridiculously expensive. A comparative graphic of MSCI country indices shows that, aside from Japan and parts of the euro zone, most developed markets' forward PEs are above 10-year averages but well below 10-year peaks.

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Some bubble worriers point to alternative models by Nobel laureate Robert Shiller, whose 10-year trailing inflation-adjusted PE gives the S&P500 a multiple of 25 to 30 percent above the average since 1950. But before hitting the alarm bell, it's also worth noting it remains below pre-2008 levels and far from the 40-plus of the dot.com bubble in 2000.

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And countering Shiller, bulls insist the signal does not account for the extraordinary support for equity from some $2 trillion of corporate cash holdings - whether in terms of more share buybacks, acquisitions or pent-up capital expenditure.

'SILLYDOM'

So if valuations are equivocal, where's the worry?

After a year when many touted a 'Great Rotation' of long-term portfolios from bubble-like bonds to unloved equity, a better measure of thinking may be the Equity Risk Premium.

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Subtracting real 10-year government bond yields from forward earnings yields, the ERP compares equities to fixed income alternatives rather than their own historical multiples.

Equities still look unambiguously cheap here, with the premium for the United States, Britain and the euro zone at five percentage points or more and still above 30-year averages. However, this has more than halved over the past two years, it is still falling and Wall St at least is already back to pre-2008 levels.

While still far from the dot.com bubble era of 'zero', its erosion is another anxiety and refocuses everyone on economic and central bank risks.

"The primary threat to market stability during the early months of 2014 is a greater-than-expected pickup in the U.S. economy, which would lead investors to anticipate a quicker start to rate hikes and challenge current fixed income and equity valuations," said Barclays' Kantor.

Or as JPMorgan Asset Management strategist Stephanie Flanders put it, equity markets need a "jobs light" recovery to keep bulled up - one where rising worker productivity keeps growth from overheating quickly and central bank policy loose.

For Flanders, this is a delicate sweet spot that needs to be maintained. Deft stock picking and regional preferences will be rewarded and "it's showtime for active managers," she said.

Cameron-Watt at Blackrock describes pockets of the bond market as clearly overvalued and the return of the likes of 'covenant-lite' loans as 'sillydom' but not yet a bubble.

Blackrock's more alarming observation was the return of investors who have "jumped on the momentum train, effectively betting yesterday's strategy will win again tomorrow."

If that's what's propping markets up, it may be time to call a cab. (Editing by Ruth Pitchford)