As share prices rise, so does the risk of correction

Posted by Ravi Gulati | Posted in Economy & Markets, Financial Planning | Posted on 03-12-2013

When investors get too optimistic, it’s usually a sign that stocks are setting up for a fall.

Ned Davis, senior investment strategist at Ned Davis Research, says sentiment is bullish enough for him to start preparing for a 20 per cent drop in U.S. shares prices “sometime over the next year.” He doesn’t see a drop tomorrow or next week. But a review of sentiment indicators tells him it’s time to start planning for some downside action in stocks.

What are the warning flags?……………………………

As share prices rise, so does the risk of correction | Toronto Star.