The original essay plan for this article was put together in January, and so it is with an unpleasant mix of irritation (because we didn’t publish it sooner) and impotent smugness (because we told you so, only we didn’t) that we have watched the market stumble in the last few days. Our view for some time has been that after almost nine years of gains and with global stock markets trading at all-time highs – the very broadly evident optimism towards risk assets which had gripped investors until very recently was somewhat misplaced. Before the tide turned on the back of US payrolls data last Friday, 2018 had seen the Dow Jones and FTSE 100 break out of their historic ranges, and record flows into index tracking ETFs. The economic backdrop in nearly all corners of the world appears stable and, in many cases, is improving (particularly in the US) while central bankers’ extraordinary monetary policies of ultra-low interest rates and money printing, as the FT recently put it, “look as though they might actually allow the world economy to take off again without having to endure a crash or a bout of hyperinflation first”. But as we have seen since stocks began to tumble in the US, then Asia and Europe, asset prices are not the same thing as the economy. Further, behind all the euphoria, there has been a consistent narrative among more sophisticated investors that a correction is inevitable and probably desirable, and that asset prices have become overly inflated during the ‘endless bull market’ which has driven them forward since the end of the credit crunch.