This is not a blog about Game of Thrones nor is it a fearless forecast of the northern hemisphere’s axis moving away from the sun later this year. But it has certainly become the fashion to call a top to this global market rally and herald a long wintry period of low returns.

Valuations are in dangerous territory in the eyes of well-known measures like Schiller’s Price/Earnings Ratio and Buffett’s Total Market Capitalization/Gross Domestic Product Ratio. Volatility, as measured by market indices, is way down, yet fear, as measured by cautionary pronouncements and geopolitical tension, is way up.

Indices, models and ratios serve as guidance to investors. A singular snapshot of today’s market conditions can justify current asset valuations. But take a whole series of snapshots and we can ask whether these conditions must remain constant to justify the net asset values assigned by the market’s participants. With a few notable exceptions, most widely-held stocks are trading at high multiples of their annual earnings, justified by a steady stream of good economic news, earnings growth, low interest rates and a whole lot of money sloshing around. Each day the market sets a new high, more and more index components appear to analysts to be priced for perfection. i.e., investors have supposedly priced in all the good news that might occur for these companies. Like a fresh fall of winter snow, these good news add to the excellent ski conditions… until a sneeze from the chalet down below triggers the avalanche.

Nobody knows who will sneeze. A cyber-attack might freeze critical systems for an extended period of time. A central bank could badly miscalculate. (It must be said that whilst they are often criticised and second-guessed, our central bankers and other stewards have certainly been adept at manoeuvring through the slalom gates since the GFC. But the Orange One somehow claims credit.)

There is of course no reason to panic and head for the bomb shelters (unless you’re in the crosshairs of some of these missiles spotted flying around lately). However, we would caution investors to keep asking, “What if?” What if interest rates do go up faster than anyone anticipated? What if the OPEC pact collapses and every revenue-hungry producer pumps away? What if Kim Jong-Un, Robert Mueller, a dozen Samsung Note 7s, six Russian hackers, three French hens, Hurricane Irma and Mario Draghi all walk into a bar and the Volatility Index barely looks up from his drink?

What if? What if we put our money in investments whose earnings are predicated on intrinsic cash flows and not on finding the “greater fool” to take it off our hands at a later time? We would, over time, recover our principal and make a profit regardless of security price movements. This is true of stocks of good companies, bonds of sound borrowers, various types of income property and infrastructure projects. This may not be true of commodities, negative-interest deposits or that can’t-miss stock that’s trading at 250x earnings. Yes, correlations approach 1.0 when the avalanche hits but diversification is still an economical method to mitigate damage in the medium to long term which is what our term should be, after all. We favour stocks with sustainable dividends, alternative investments and flexible strategies that can take the offensive when the greater fools go on defence.

This ski lift may not have reached the top but it may only be the clouds that obscure how close we are. Best to be ready. Not just for the winter but for the spring that inevitably follows. Whilst it’s a good time to check the storm shutters, there’s also no better time to plant crocuses.