the economic conditions of the moment. The market is not priced in reality. Instead, speculators have established the position that the economic malaise will be short-lived at worst.

While that view may be justified (as I do believe the U.S. economy is diversified to the point of recovering from the housing and credit mess), it seems like a bit of a risky position.

Add it all up, and the ingredients are in place, for some selling here. That does not mean I am negative about the future. Instead, I believe that we need to allow time and distance to do some healing with the economy before becoming more aggressive with our portfolios.

Richard Band in his Profitable Investing journal shares a similar sentiment. As he states, a near- term top has been put in place and the market may simply need to rest and digest from here.

I'm a bit more pessimistic in the near term. I find it fairly amazing that stock values can rise given the very real negatives for the economy. Rebate checks and gas tax suspensions will not cure what ails us.

Fueling the rally has been stronger-than-expected earnings and a realization that the economy is not yet in recession. Indeed, the numbers are impressive, but keep in mind the source of that strength.

Most of the biggest profits are now coming from overseas sales. The weak dollar really helped exports, and that simple fact has kept us out of recession.

Will that trend continue?

I doubt it. The reality is that we are sort of delaying the inevitable. Global growth still hinges on a strong U.S. economy. Without that strength the rest of the globe will ultimately follow suit.

As a result, exports can be expected to slow unless of course the dollar continues to tumble. Ah, but the dollar tumbling invariably creates its own set of problems like inflation.

Again, the headlines to this story may be negative in the short run, but that does not mean we won't rise again. We will.

It just takes time and given that we have time, not to mention good technical reasons, we should be more conservative with our actions.

Richard Band suggests making a switch from the large-cap equity fund, Longleaf Partners (LLPFX) to the more conservative bond and equity fund, Selected American Shares (SLASX).

When folks like Warren Buffet, John Bogle, and now Richard Band recommend more conservative allocations in a portfolio, I would listen.

There are some very compelling reasons to believe the market may be in for a rough ride in the near term starting with the supposedly very merry month of May.

The smart money has quietly built its holdings on the same stocks Richard Band has been buying at Profitable Investing for years! Get the seasoned perspective you are looking for! Sign up now for your RISK-FREE trial subscription! Richard Band's recommendations for conservative investors have grown 900% since 1984! Don't miss out! Click here to get started today!