Global stock markets are set to peak in the next few months but hungry investors should beware, according to Bob Janjuah, Nomura's uber-bearish strategist, who believes a hefty dip in global stock markets is just around the corner.
The end of this quarter till the end of the first quarter of 2014 is the buying window Janjuah sees as "the risk-on top", he said in a client note on Tuesday. After that he predicts a 25 percent to 50 percent sell-off over the last three quarters of 2014.
"While my target for this high in the S&P over the next five months remains anchored around 1,800, an 'extreme' upside target could see the trade up to 1,850," he said. "I am looking – as a proxy guide – for the VIX (CBOE Volatility Index) index to trade down at 10 between now and end (of the first quarter of 2014) before I would recommend large-scale positioning for a major risk reversal over the last three quarters of 2014 and over 2015."
(Read More: S&P 500 to Dip 5-10%, Then Soar: Nomura's Janjuah)
As an extra cautionary measure, Janjuah added that an interim sell-off could occur before the end of November due to markets having priced in all the recent good news on growth. There's a possibly a period of risk-off this month could take the the S&P from 1,775 to perhaps 1,650/1,700, or even as low as the 1,600/1,650 area, he said.
And the reason behind all these concise calls? Anemic global growth, mediocre fundamentals and "dangerously" loose monetary policy, according to Janjuah. As well as too much debt, an enormous misallocation of capital and excessive financial market speculation.
"In the context of growth surely I am not the only person surprised at policymakers, especially in the U.K. and the U.S., where seemingly the only solution to massive financial market and economic failures is to resort to more of the same of what caused the original problems – namely debt-driven consumption, debt-driven asset price speculation, and the expansion of the 'ponzi' that best describes our modern day economic 'model'," he said.
"The next five years has to be about a rebalancing towards the 'real economy' and the bottom 90 percent, at the expense of the top 10 percent. This shift in policy emphasis will not be a happy time for financial markets and speculators while the transition happens, but in the very long term will be seen as a major positive event."
The S&P 500 Index sat at 1,762 points on Wednesday morning, 24 percent higher it was than at the start of the year. Liquidity pumped into capital markets is seen by many as being the major reason behind this push higher for stocks. The U.S. Federal Reserve's $85 billion-a-month asset purchases has run alongside similar programs in the U.K. and Japan. The U.K. FTSE 100 Index has added 14 percent year-to-date whilst Japan's Nikkei 225 has logged a staggering 37 percent rise despite the odd stutter.
Janjuah's tip going forward is for investors to own strong balance-sheet corporate credit spread - which is the difference between a government and a non-government bond. He also likes Italian government debt, which currently yields 4.15 percent, and still likes the U.S. dollar in favor of the which has depreciated by 14 percent against its American counterpart this year.
To hedge this, he recommends a small "long-risk" trade on going long bank equities, via an option – the financial derivative that gives the buyer the right, but not the obligation, to purchase an underlying asset at a specified date. This, he says, is just in case the speculative bubble takes longer to peak and hit levels even higher than his forecasts.
By CNBC.com's Matt Clinch. Follow him on Twitter @mattclinch81