The dramatic stock market sell-off earlier this week should be viewed as a turning point, according to analysts.
"Our ongoing concerns about the recovery's tenure have been thrown into sharper focus by the steepest market sell-off since the credit crunch," Eoin Murray, head of investment at Hermes Investment Management, said in a research note published Thursday.
On Monday, the Dow dropped 1,175.21 points, having briefly declined more than 1,500 points during the session. And while U.S. stocks have since pared some of the losses sustained during a cascading market plunge earlier this week, the Dow, S&P 500 and Nasdaq are all down more than 4 percent since Friday.
The market has generally been moving higher for about nine years, the second oldest bull market on record without at least a 20 percent drop in the S&P. During that time, indexes have gained around 300 percent, not including dividends.
Nonetheless, over the past year, the record bull run has been viewed with skepticism by many market watchers, who have frequently warned against historically overvalued stock prices. The main drivers of so-called inflated asset prices are thought, in part, to stem from synchronized global growth, unhinged exuberance among traders and prolonged stimulus from central banks.
"Central bank tightening, or at least the end of post-crisis monetary accommodation, will undoubtedly prove challenging," Murray said.