Investors should be aware of two potential risks that could lead to bear markets, according to Ron Insana.

Has the risk of a full-blown bear market risen on Wall Street?

Although a standard-issue correction has been issued for the Nasdaq Composite, the bigger issue is whether stricter central bank policies in the Western world will result in more significant declines than we have already witnessed in major averages and individual stocks.

Legendary investor Stanley Druckenmiller revealed to me that his historical analysis indicates that two primary factors can cause significant stock market bear markets: an increase in interest rates and the outbreak of war.

The Federal Reserve has acknowledged that it plans rate hikes and a reduction in its holdings of this year, while saber-rattling is occurring from the Kremlin to Kyiv and from Tiananmen to Taiwan.

Quantitative tightening, which involves reducing the Fed's balance sheet, would be a potent complement to rate hikes in curbing market surplus liquidity. Based on historical trends, it is likely to exacerbate the decline in equity markets during the tightening cycle.

The mere anticipation of these events caused markets to plummet, resulting in the elimination of speculative excesses in cryptocurrencies, meme stocks, and SPACs.

The shares of and have experienced a significant decline, with each share being down approximately 80% from its peak.

Before the market's safer investments, weak assets are typically the first to decline.

The NYSE Advance/Decline Line is showing a positive trend, while the number of new 52-week lows has increased significantly.

Although some sentiment indicators, such as the VIX (or fear indicator), have recently reached high levels, indicating an oversold rally, I believe that this turbulence is not yet over in the long term.

A time of heightened risk around the world

The threat of a Russian invasion of Ukraine is increasing, prompting the U.S. to put troops on alert and NATO to reinforce its positions in Eastern Europe. Additionally, NATO allies are reportedly sending weapons to Ukraine to bolster its defenses.

Washington's response to Russia's demands that Ukraine never join NATO was met with pessimism by Moscow.

The U.S. State Department advised family members of diplomats and embassy staff to evacuate Ukraine due to growing concern that Russian President Vladimir Putin is not joking about his intentions to invade the country. This belief is supported by the 100,000 Russian troops, weapons, and logistical support amassed on Ukraine's border, as well as reports that Putin is attempting to install a pro-Russian president in Kyiv.

In 2022, the stocks that performed well alongside oil prices in the previous year have experienced a decline.

As oil prices rise and investors seek safety in U.S. Treasury bonds, the markets convey a threatening message.

Over the weekend, the Taiwanese Air Force had to scramble and chase away 39 fighter planes due to renewed Chinese flyovers in Taiwan.

If an economic war occurs between the West and Russia, with sanctions such as cutting off Russian energy exports, blocking Russia from using SWIFT, or placing export controls on goods going to Russia, the global economic stakes will increase significantly.

If Putin and Xi Jinping are working together to undermine Western alliances and strain relationships, the risks become even greater.

A set of developments could cause central banks to remain unchanged and result in a more accommodating Fed.

While risk assets may have performed better, the overall market environment remains unfriendly, particularly with a three-year bull run, high valuations, and speculative excesses in certain areas.

In 2020, the bear market caused by the pandemic lasted for 21 trading days, with the S&P 500 experiencing a 34% drop during the most condensed bear market on record.

I'm not as hopeful that the next bear market, if it begins, will end swiftly or cause minimal harm.

Cash may no longer be trash in 2022.

— Ron Insana is a CNBC contributor and a senior advisor at Schroders.