With the year all but finished, the S&P 500 is up more than 15% and it looks like the bears have been proven wrong. But according to the BlackRock 2015 Investment Outlook, a lot of those gains came from accounting tricks, not actual business growth (h/t Zero Hedge).

“S&P 500 profits are 86% higher than they would be if accounting standards of the national accounts were used,” BlackRock writes, citing research from Pelham Smithers Associates. “And the gap between the two measures is widening.”

S&P 500 earnings estimates will be hard to reach next year

For value investors the disconnect between low single-digit GDP growth and double-digit price increases is pretty clear, at some point the two things have to get back in line. But it’s surprising to hear a mainstream asset manager making the same argument and warning that Wall Street’s bullish forecasts are going to be hard to achieve. Outside of Russian equities, which carry a lot of political risk right now, nothing is particularly cheap.

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A few asset classes have retreated since the end of 2013, US and European high yield debt being two notable examples, but there really only back in line with their historical average. US equities, already the most fully valued after the 2013 bull market pulled even further ahead of the pack this year. Even if US GDP growth accelerates, the upside seems limited.

High yield dispersion as a measure of complacency

The BlackRock report also points out how complacent the market has become, using the dispersion of high yield debt as a gauge.

“The U.S. high yield market is a canary in the coal mine. It is at the bottom of the capital structure (only equities are lower), where defaults first bite,” the company writes. “If you are not getting dispersed returns in this asset class, something is wrong: Investors are too complacent.”

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Their conclusion is that investors need to protect themselves now, opting for quality and liquidity over yields and accepting lower returns in the short term. Because a lot of investors have been forced to take on more risk than they’re used to while reaching for desired yields, they are likely to react more quickly to bad news. Anyone who has kept some dry powder will be able to look for buying opportunities when others are rushing for the exit.