This will be a risky five-year stretch, with 20% drops possible at the first sign of any economic hiccup, foreign or domestic. Without bubble-grade stock valuations or underlying large-scale economic problems like real estate speculation, 50%+ stock drops are less likely than they were during past peaks, yet always possible.

After years of separation, investors have finally rekindled their love affair with stocks. That on-again, off-again romance is definitely back on again, with billions going back into stock funds each month. Investors' infatuation with bond funds is also ending. Nearly $100 billion have come out of bond funds in 2013. They're just not that enticing anymore. Does this mean we should expect trouble down the road for the stock market, and if so, what sort?

As the stock market continues to rise, we hear experts claiming stocks are not that expensive compared to bonds. They cite modest P/E ratios and record earnings. While the P/E ratio of the market (looking at real earnings, not future expected earnings) is far from a historical bargain, it has been pricier in the past. 

The economy and markets are heavily influenced by purely psychological factors. People spend or invest based on fear, optimism, and expectations for the future. Consumers and investors make decisions based on tangible factors like wage growth and tax rate changes, but they're also surprisingly motivated by fluctuating optimism. It's entirely possible that most booms and busts are largely caused by swinging collective expectations.