I think most of us would agree that there is a day of reckoning in the stock market heading our way.
What do you think will be the signs/markers of the beginning of the downturn?
The next downturn will come from China.
They're pace of growth was unsustainable and debt levels have reached levels that often point towards an impending downturn. They're showing symptoms that we've seen in Western nations leading up to recessions.
It being China will cause it to be large by itself. It'll be exacerbated by the failure that is the FED today. Ever since Greenspan lost his spine the institution has been a joke (they responded with the correct ideas in 2008, but their implementation was disgusting) and the gutlessness of the current FED leadership keeping rates where they are greatly reduces their ability to confront another large downturn.
Depending on where the UK is can add fuel to the fire. They've put themselves in an unpredictable position, which will lead to more volatility if the world markets roll over.
This doesn't mean people should be liquidating portfolios. If you're confident in your holdings, keep on holding. I'd hold off on adding to positions unless you find a really good deal somewhere. One should also be wary of holdings that are trading at a premium to their historical valuations. An example is something like XOM; currently trading at > 30 p/e while historically in the low teens. Something like that would get crushed in the next market downturn and likely won't return to its former valuation unless conditions of today end up again. Something like AAPL or HSY will get hammered, but will bounce back as the recession ends.
It's coming, this bull run has been unnaturally long. It's part of the market cycle. The sky won't fall for ever but all bull markets must end, only to be reborn soon after the bear departs. Cash will be king beforehand and those who can stomach it knowing it doesn't last forever will be the ones to profit.
** personally cashed out of market early this year to provide funds for two new businesses, not because the sky might fall. Funds will be returned to an equities account start of summer 2017 along with a sizable flow of new funds from the businesses. Will wait for lower valuations to put it back in equities because it will start with a lump sum and we are too far into a bull cycle. This could be tomorrow, next month, next year, in two years. Nobody really knows. Statistically though it's more close than far. In the mean time the funds were better utilized in a business in real estate and another in the fastest growing industry in America.