So, the Dow‘s at all-time highs and the S&P 500 is darn close. Sitting across from equities are bonds, which have been slightly on the decline as of the past few months, but which still are at relatively high prices compared to the past few decades.

The rising tide probably has lifted the boats of many a retirement planner, but after all that climbing, it’s time to take a breath and ask the big question: “What do I do next?”

Unfortunately, the tendency for many is to jump into a roaring market only to see gains slow — or worse, to see the market crumble an hour after they bought in. Indeed, that’s exactly what people do, says Louis S. Harvey, the president of Boston-based research firm Dalbar who has been studying investor behavior for more than 20 years. Harvey laments to The New York Times that “when the market is already high, many people start to buy. When it’s already fallen, they sell.”

With the market obviously “high,” the questions become somewhat strategic. Should your retirement planning include new investments? How about reallocating money into new sectors? Is it time to just sell into the rally and lay low for a while?

All good questions, and all (in my opinion) share the same answer: yes.

Buying

Now, I don’t advocate jumping in with both feet into just any old investment. But you should be open to new or additional investment if the target is right.

Consumer staples, for one, still look solid despite leading the market higher. Stalwarts like Colgate-Palmolive (NYSE:CL), Clorox (NYSE:CLX) and Johnson & Johnson (NYSE:JNJ) might be at or near all-time highs, but their valuations and fundamentals are still strong, and as Dan Burrows points out, these are defensive stocks, meaning you shouldn’t get hit too hard on the down side. So this is one area you certainly could consider easing into.

Sell and Redeploy

Suppose you decide to sell some winners and redeploy the money. That’s exactly what I did at the end of last week. I’ve held Time Warner (NYSE:TWX) and Time Warner Cable (NYSE:TWC) since the original split from AOL (NYSE:AOL).

With TWX’s planned spinoff of its publishing assets like Sports Illustrated, I still like the stock. However, I decided TWC and AOL both had a nice enough run for my money, and sold them off. Now, my plan is to plow those funds into Verizon (NYSE:VZ), which I like as an alternative media play with mobile upside. But most of all, I like it for peace of mind. VZ currently has a fat 4.3% dividend yield; I already own shares of VZ, but am looking to add more simply to bolster my regular income.

I’m not in a hurry — VZ has been on a tear of late, and while its forward price-to-earnings ratio of 15 isn’t horribly overvalued for my tastes, I do want to see if Verizon can cool off just a bit first.

Sell and Park

Of course, if any of your stocks are looking overvalued or you’ve reached an acceptable return, and you don’t like any new equities for reinvestment, it’s OK to hoard some gains until you find something you do like. You can park your money into any number of different money market funds at providers such as Fidelity or Vanguard, so lighten the load if you feel the need — just don’t shove it under the mattress.

Bottom Line

The recent rally is probably scary to those of us who have been burned at least once before, and those who are newer to the game might feel like they’re falling behind.

Don’t feel that way at all. You can stay active without getting burned.

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long JNJ, TWX and VZ.