Political turmoil, trade disputes, high valuations, geopolitical tensions, and a salvo of other assaults — nothing seems able to kill the bull.

But risks remain. Below, I’ll show you how to protect your investments and still tap growth. I’ll pinpoint the most appealing sectors and asset classes at this stage in the economic cycle.

The bull market in stocks that began in March 2009 is the longest in U.S. history. Meanwhile, the current U.S. economic expansion keeps fending off deathblows, too. According to the National Bureau of Economic Research (NBER), the longest expansion in U.S. history occurred from March 1991 to March 2001. By the NBER’s yardstick, just one more month of growth would make this the longest expansion in our country’s history.

The current expansion started in June 2009, amid the rubble of the global financial crisis, and was fueled by ultra-low interest rates. The lynchpin of the decade-long expansion has been consumer spending, which accounts for two-thirds of U.S. gross domestic product (GDP). Signs in recent months of weakening consumer sentiment have made market watchers anxious, so it was with a sigh of relief that May’s retail sales numbers came in strong.

The National Retail Federation reported last Friday that retail sales rose 0.5% in May seasonally adjusted from April and up 3.2% unadjusted year-over-year. That was surprisingly good news, considering the backdrop of a volatile stock market and escalating trade war.

Stocks last week edged higher, with small-cap equities outperforming. As I’ve recently written, the small fry are poised for outsized gains this year.

Read This Story: Small Caps Are Flashing a Buy Signal

For the week ending June 14, the S&P 500 gained 0.5%, the Dow Jones Industrial Average gained 0.4%, and the Nasdaq gained 0.7%. Year to date, the S&P 500 has gained 15.2%, the Dow has gained 11.8%, and the Nasdaq has gained 17.5%.

Of course, bull markets and economic expansions never last forever. Economic cycles typically last between five and eight years; the average bull market lasts 4.5 years. We’re overdue for an economic downturn and a correction. In the fourth quarter of 2018, the S&P 500 came within a whisker of a 20% drop, the threshold definition for a bear market. Indeed, the tech-heavy Nasdaq briefly entered bear territory in December.

Un-stop-a-bull?

This economic expansion and bull market don’t get much love from nervous market observers, but conditions seem to be in place for continued growth throughout this summer.

Unemployment hovers at a 50-year low, wages are growing (albeit modestly), inflation is under control, and U.S. GDP growth in the first quarter came in at an unexpectedly robust 3.2%. Sure, global growth is slowing, but it’s not contracting.

After a bout of tightening, the Federal Reserve has adopted a neutral stance on interest rates and has indicated a willingness to even cut rates if the recovery appears jeopardized. We’ll know more when the Fed’s policy-making Federal Open Market Committee meets on June 18-19.

One worrisome indicator is the inverted yield curve, which indicates that yields on bonds with a shorter duration are higher than the yields on bonds that have a longer duration. Historically, inversions of the yield curve have preceded several U.S. recessions.

The difference between the 10-year U.S. Treasury and the 3-month T-bill does indeed show an inverted curve (see chart).

Source: Federal Reserve Bank of St. Louis

In a normal yield curve, short-term bills yield less than long-term bonds, because investors expect a lower return when their money is tied up for a shorter period. This is logical because the longer someone borrows your money, the more you’d expect them to pay you. As we learned in Finance 101, bond prices move in the opposite direction of yields.

When a yield curve inverts, it’s because investors are losing confidence in the near-term condition of the economy. They expect more yield for a short-term investment than for a long-term one, because they view the near-term as riskier than the more distant future.

They’d rather buy long-term bonds and tie up their money for the long haul even though they receive lower yields. They’re motivated to do this because they think the economy is deteriorating in the near-term.

How to invest now…

In this mixed bag environment, how should you invest? For starters, be wary of “groupthink” and the yakkers on financial television shows.

Let’s turn for advice to Warren Buffett. I know financial writers love to quote Warren Buffett, but hey, the guy is worth $81 billion, so he must know a thing or two. Buffett once said:

You need to divorce your mind from the crowd. The herd mentality causes all these IQ’s to become paralyzed. I don’t think investors are now acting more intelligently, despite the intelligence. Smart doesn’t always equal rational. To be a successful investor you must divorce yourself from the fears and greed of the people around you, although it is almost impossible.

Indeed, contrarianism is a guiding principle of Mind Over Markets. Despite the increasing prevalence of algorithmic trading, markets are still governed by human beings, who in turn are driven by fear, greed and other emotions that cloud judgment. If there’s a common thread to my column, it’s to buck the conventional wisdom.

Fact is, average investors tend to buy and sell at the wrong times. Market tops make them “feel good,” prompting them to pile in when valuations are too high. You need to keep an eye on the long-term horizon, not short-term theatrics.

The upshot: Enjoy the protracted bull market, but tread carefully. Gravitate toward value and defensive sectors. Now’s a good time to pocket at least partial gains from your biggest winners; overvalued large-cap tech stocks are good candidates. Elevate the cash level in your portfolio to at least 15%.

Sectors appropriate for a late-stage economic recovery are utilities, real estate, consumer staples, and health services. Gold prices have rallied lately and the yellow metal should continue its upward momentum, as international military tensions, especially in the Middle East, get worse. Every portfolio should hold at least 5%-10% in precious metals, as a hedge.

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John Persinos is the managing editor of Investing Daily.