Warning signs of a possible stock market slide

Ever since the stock market started advancing again eight years ago, investors have been trying to predict what might bring it down.

There has been no shortage of candidates, from political uncertainty and pockets of economic weakness to elevated stock prices.

The list of potential dangers is limitless, but I would argue the following three factors loom largest in terms of potential impact. They aren’t all negative, but they are significant — and clearly on investors’ minds.

Federal Reserve policy

The central bank’s Quantitative Easing programs, designed to kickstart the economy during the recession and keep the recovery moving, have coincided with a sharply higher stock market and rising prices for other assets.

But the QE programs — focused around the Fed buying bonds with fabricated money to inject funds into the banking system — weren’t designed as permanent policies. That has prompted investors, economists and others to speculate on the eventual impact as the Fed reverses or unwinds these programs.

“Investors would be well-served to keep in mind that QE was far and away the biggest factor that drove asset inflation for the last eight years,” wrote David Karp of PagnatoKarp, a financial-advisory firm in Reston, Virginia. “A reversal of QE is one such event that will likely be disruptive to the artificial tranquility so enjoyed in the recent past.”

Stock prices have roughly tripled since QE1 was launched in November 2008, during the recession, followed by QE2 in August 2010 and QE3 in September 2012. With the Dow Jones Industrial Average and other yardsticks still near record highs, investors don’t appear overly concerned. The feeling seems to be that the Fed