Six reasons that the risk of a stock-market selloff is rising. Here’s what investors should be doing.

Longview Economics has issued a cautious warning for equity investors: many markets are now "priced for perfection." In a new note, the research firm lays out six reasons why the risk of a stock-market selloff is rising, arguing that current asset prices leave little room for error.

The central concern is that valuations already reflect an optimistic economic and earnings outlook. When markets are priced this way, even mildly disappointing data can trigger a sharp repricing. Longview's warning is significant because it comes from a research house focused on technical and macroeconomic signals, suggesting the risk is broader than any single sector or region.

For investors, the practical takeaway is not to attempt precise market timing but to stress-test portfolios against a scenario where momentum reverses. The firm’s message underscores the importance of understanding concentration risk, valuation sensitivity, and one's own time horizon. In an environment where the "perfect" scenario is already priced in, what matters most is preparation. Watching key economic releases and central-bank communication for signs of divergence from expectations can offer clues as to whether the selloff risk remains elevated or begins to diminish.