Here’s what it will take to trigger the next stock market correction


By Anatole Kaletsky – Sometime in the not-too-distant future, investors are certain to suffer some big and painful losses — even if I am right in expecting equity prices to continue rising in the long term.

What kind of event is most likely to end this bull run, or at least interrupt it with a setback of 20 percent or more?

If stock market valuations are not yet high enough to cause a big correction — and if monetary and economic conditions are likely to remain benign for the next year or two — then the unavoidable conclusion is that equity prices will just keep rising until they really do become over-extended.

At that point, negative news events of the kind that investors can shrug off today as almost irrelevant will prove sufficient to trigger a serious correction. more> http://tinyurl.com/lgsbgyd

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