Since the beginning of 2003, the stock market has done pretty well, recovering nicely from the big technology debacle. At that time, it was not overly difficult to figure out that the market was due for some upside. The change in market sentiment alone provided a significant boost, but the rally was supported by solid growth in corporate earnings, as well as strong economic growth.

I do not feel good about this stock market these days, but, for the most part, I'm unable to explain why. Even though short- term interest rates are rising, they are still very low historically and corporate earnings are holding up well. Energy costs are skyrocketing, but overall inflation (as measured by recent CPI data) is actually quite tame. In any case, I just can't figure this market out. This is a feeling, I think, shared by the broader investment community.

I am unable to escape the feeling that a major change is coming in the stock market. Perhaps the market's current focus on oil prices will subside and a new market sector will come into favor. Whichever sector that might be, it will likely be one that produces stable cash flow. The healthcare sector might certainly come back into focus later this year.

Regardless, you want to be playing some solid defense in the current environment. The housing bubble situation is becoming troublesome, as Michael discussed earlier, but who knows when that will come to a head. Real estate booms can really last a long time, and, even though many people and the media are saying prices are out of control, my guess is that real estate prices have a lot further to go.

If you have a portfolio of stocks, you should keep riding your winners and cut your losers. With a big shift coming in stock market sentiment, things are likely to become volatile in the third and fourth quarters.