Wall Street has been partying like a bunch of guys at a bachelor party. You should push yourself away from the bar, sober up, and get to a “safe haven.” Below, I examine two safe haven assets that are particularly appealing now.

But first, let’s review three impressive feats achieved last week in the markets:

1) The S&P 500 climbed 2.3% to hit a new all-time high, as investors shrugged off trade war fears. Federal Reserve dovishness and resilient U.S. economic growth added to Wall Street’s ebullience.

2) Gold prices surged 4% and broke above $1,400 per ounce for the first time since 2013, fueled by increasing hostilities between the U.S. and Iran. Military action was averted at the 11th hour last week, which relieved the stock market. However, geopolitical tensions continue to buoy the yellow metal.

3) The price of crude oil soared more than 9% for the week, racking up its largest weekly gain since December 2016. Oil had been slumping, as signs point to a supply glut combined with slowing global economic growth. However, the flare up of tensions in the Middle East stoked concerns about supply disruptions. The recent recovery in oil prices has served as a bullish catalyst for stocks, because investors interpret a robust energy patch as indicative of overall economic health.

Approaching the half-way mark…

The S&P 500 is on track to post a gain of nearly 18% for the first half of 2019, which ends Friday. That would represent the best half-year performance in 22 years.

As of this writing on Monday morning, the S&P 500, the Dow Jones Industrial Average, and the tech-heavy Nasdaq were all trading modestly higher. Oil prices also were heading higher today, boosted by tensions between the U.S and Iran.

Trade conflict remains the biggest wild card. Investors are betting that President Donald Trump and Chinese leader Xi Jinping will reach some sort of trade agreement at the G20 meeting that starts this Friday. It’s uncertain whether they will, but in my mind, one thing is certain: Investor overreaction to political theatrics is a red flag that this bull market faces a day of reckoning.

I also believe that Wall Street has been overthinking Federal Reserve policy. You should stick to your long-range plans and not make knee-jerk decisions based on the cryptic utterances of the Fed chair. Focus on the fundamentals of your holdings.

Read This Story: Your Next Moves in This Mixed-Bag Market

That said, with the second half of 2019 about to start, it’s time to calibrate your asset allocations according to the economic cycle. By historical precedent, U.S. stocks are long overdue for a bear market. The average bull market since World War II has lasted just 52 months. The current bull market, which started in April 2009, is now more than 10 years old.

According to the widely followed Cyclically Adjusted Price to Earnings (CAPE) Ratio, stocks in the S&P 500 sport excessive valuations with eerie parallels (see chart, which depicts the latest data as of market close June 21).

The CAPE ratio is defined as price divided by the average of 10 years of earnings (moving average), adjusted for inflation. This measure provides a more meaningful context than the standard P/E ratio. The CAPE ratio now stands at 30, compared to the historical median of 15.7.

At the same time, projected corporate earnings growth is hardly gangbusters. According to the latest projections from research firm FactSet, the estimated earnings decline for the second quarter for the S&P 500 stands at -2.6%. Now that the stimulus from the 2017 tax cut is waning, corporate earnings are deflating like a punctured tire.

If -2.6% turns out to be the actual earnings decline for the quarter, it will represent the first time the S&P 500 index has posted two consecutive quarters of year-over-year declines in earnings since Q1 2016 and Q2 2016. It will also mark the largest year-over-year decline in earnings since Q2 2016 (-3.2%).

How should you trade in this precarious market? Reduce your exposure to growth stocks; pocket some profits from your winners that are overvalued; increase your allocations in cash; and make sure your portfolio contains at least 5% to 10% in gold. If you had followed my advice at the beginning of this year to increase your stake in gold, you would be sitting on some nice gains right now.

Let’s examine two safe haven investments that make strong sense now: gold and utilities.

Gold regains its luster…

Maybe there’s an investment message behind President Trump’s installation of gold curtains in the Oval Office. In the turbulent Trump Era, you probably can expect the emergence of “gold mania” among increasingly anxious investors.

However, the time to embrace the Midas Metal isn’t when the rest of the investment herd already is piling in.

Don’t wait to hear someone on late-night television hawking gold after prices have already hit the roof. The time to buy safe haven investments is now, before fear pushes up their prices.

I prefer owning gold mining stocks to physical bullion. If you own gold mining stocks and the price of gold goes up, the notion of “operating leverage” comes into effect. A bump in gold prices will likely exert an exponentially huge boost on a gold producer’s top line revenue.

Because the gold producer doesn’t have to put a whole lot of additional labor or capital into digging out increasingly valuable gold, its earnings per share should go up and take the stock’s share price with it. Also, it’s an expensive hassle to store and secure the actual metal.

The power of utilities…

Remember, diversification is crucial to any investment strategy. As a fraught second half of 2019 unfolds, consider re-balancing your portfolio to accommodate the likely economic, business and market volatility ahead.

One sector that’s been on a tear lately is utilities. Even when the broader stock market is plunging, there’s usually at least one corner of the market that provides a safe haven.

In a sharp and prolonged downturn, such as the one we witnessed during the 2008-2009 global financial crisis, utilities typically do a superb job of retaining their value relative to the overall market.

That doesn’t mean utilities are immune from overwhelming headwinds. Utility stocks fell during the crisis, but not nearly as much as the rest of the market. One compelling case for utility stocks now is their insulation from tariff conflict and overseas instability; their sales stem from domestic markets and they provide a service that everyone needs.

Consider this: investors in growth stocks suffered losses of between 40% and 60% in 2008, while the average portfolio of Utility Forecaster (an Investing Daily publication) was down only 18.2%, according to data from The Hulbert Financial Digest.

Throughout the savage 2008 downturn, utility stock investors enjoyed reduced losses and a steady stream of dividends.

Other “safe” sectors worth considering for the second half of 2019 are consumer staples and health services. These industries tend to be recession-resistant because they provide must-have products and services.

A major factor keeping the bull alive is low interest rates. The Federal Reserve last week left the door open to further rate cuts, but that could quickly change, depending on the vagaries of economic data.

The bull market party remains boisterous, but the hour is getting late. Judgment is getting clouded. Start making your way to the door. Unprepared investors are in for a hangover.

Questions about safe haven investments? Drop me a line: mailbag@investingdaily.com

John Persinos is the managing editor of Investing Daily. He also serves as the managing editor of Utility Forecaster.