On the last trading day of November, the Dow Jones Industrial Average opened at a new record of 19,136, having just broken through a historic barrier of 19,000 a few days earlier.

Before you break out the party hats, though, it seems that most investors and analysts are holding off the big celebration until Dow 20,000. And a mere 5% upside move would take it there.

The post-election market action seems to provide reasons for such optimism. Stocks rallied, bonds sold off, and gold weakened.

But what’s been especially remarkable about this market action isn’t that equities and bonds went their separate ways. What stood out over the past month is the difference, or spread, between “risky” assets (aka stocks) and “safer” ones (like bonds).

The chart below depicts the S&P 500, Dow Jones Industrial Average, long-term Treasuries and gold, through a variety of exchange-traded funds (ETFs). The 10%-plus spread between the SPY (which tracks the S&P 500) and TLT (which tracks treasuries) indicates that the recent optimism was anything but cautious.

Rather, this action is indicative of the repositioning both bond and stock investors have been undertaking in the past few weeks. Traders and tactical investors had to do this quickly: Many of their market expectations needed to be re-evaluated, in the context of what had already been a strong stock market and weakening bond market.

Still, much of what the market now expects and has been pricing in — such as a financial deregulation, the repeal of the Affordable Care Act and massive infrastructure spending — is still rather uncertain. Lower corporate taxes, more relaxed fiscal policies and higher inflation should all be bullish for stocks. But with so much uncertainty lingering, this exuberant post-election market seems to be pricing in a high-risk/high-reward scenario.

The bulls have the wide breadth of the rally on their side, with many stocks and several sectors advancing, and small-cap stocks strongly outperforming their large-cap peers. On the other hand, though, bonds seem to embody all the worst fears about where things might be going. The factors that should work for stocks will likely keep bonds from moving higher.

#-ad_banner-#First, bonds must contend with the increased confidence in the Fed’s upcoming move, as expectations for an interest rate hike continue to dominate the market. A hike or two shouldn’t be a big deal for the stock market either, although more hikes beyond that may negatively impact valuations and derail the rally.

But even though I’ve long been of the opinion that higher rates (hiked in an orderly and gradual fashion) should be well-tolerated by stocks as long as they are caused by a stronger economy, there are some causes for concern.

With inflation expectations picking up, the hand of the Federal Reserve might be forced, and it might need to act so inflation doesn’t get out of control and hurt both the economy and the stock market. So we may be faced with a situation where the Fed has to act faster than it otherwise would, causing unpredictable reactions.

Even if the rise is more controlled and gradual, we haven’t seen a rate hike in over ten years, so no one can predict exactly how the various parts of the market will react. What we can do is look for assets that are most susceptible to these and other forthcoming changes and limit our exposure to them.

With this in mind, I’ve been reviewing my Daily Paycheck portfolio, looking for the weakest links — assets that are most likely to suffer significantly from the higher rate environment, and those that operate in sectors that are expected to underperform in the next couple of years.

For example, one predictable impact of higher rates will be on companies and securities that employ leverage, either through borrowing or the issuance of a senior security for the purpose of investing. That’s because the cost of leverage might become a bigger factor than the market had expected just a month or so ago.

First, leverage costs money — just as with any borrowing, and with higher rates these costs will rise. And second, employing leverage magnifies investment results, whether it’s gains or losses.

You see, leverage works both ways. When returns are positive, leverage magnifies those gains. But it works the other way as well, bringing magnified stress in a weaker sector or a declining market.

Leverage is widely used throughout the financial world and any change in rates can therefore affect everything from share prices to the performance of various types of funds. The magnitude of this effect, however, depends on how heavily the entity relies on leverage.

I will be carefully watching vulnerable assets, as well as the overall market environment, closely over the coming months. As I recognize at-risk or potentially promising picks, I’ll be sharing them with my The Daily Paycheck subscribers. If you want to be the first to get this advice, along with my most recent picks for year-end 2016, go here.