The MSCI All Country World Index is up some 250% since the financial crisis. But was there ever a cycle in which investors were more skeptical about the market’s upward momentum, where stock valuations had to climb so many “walls of worry”?

The wall of worry is associated with a maturing cycle, when there is potential upside still to be had in stocks, but cracks in underlying fundamentals combine with rising volatility. That is what makes late-cycle investing such a challenge.

Unsurprisingly, this cycle is maturing with an especially high and slippery wall. Investors climbing it will need to work hard to maintain balance and vigilance.

Short-Term Economic Releases and Headlines Likely to Challenge Investors

After a dramatic sell-off at the end of last year, stock markets have rebounded briskly so far in 2019.

However, as Joe Amato and Brad Tank have observed, when investors adjust to softer economic data against a background of thin market liquidity, sharp upward moves can be just as common as sharp downward moves—and should not be mistaken for an “all clear” signal. If anything, underlying economic data and market risks have been worsening as equities have rallied.

Europe’s performance, in particular, continues to be poor. Italy is in technical recession and, following mixed survey sentiment and flash Purchasing Managers’ Index (PMI) results, final revisions to fourth-quarter GDP on Friday revealed that Germany has avoided the same fate by the narrowest of margins.