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Markets seem at first blush like they're poised to continue their steady course upward during 2017's second half. After all, U.S. stocks are trading at or near all-time highs, the dollar is relatively strong and the Federal Reserve is maintaining its widely anticipated rate-increase schedule. But a quick peek behind the curtain reveals three major areas of concern that mean prudent investors should re-evaluate their positions.

Let's check them out:

Shaky European Banks
The first problem I see is the underfunding and/or overleveraging of many European banks. For example, Spain's Banco Santander recently acquired shaky rival Banco Popular for the princely sum of one euro -- but must now find to steer the firm out from under a massive capital shortfall.

Italian and Portuguese banks are also struggling. Italy's Popolare di Vicenza and Veneto Banca require nearly 5 billion euros in additional capital to remain afloat. Meanwhile, Portugal's central bank has agreed to a deal to sell control of Novo Banco to U.S. private-equity firm Lone Star.

Finally, let's not forget that Greece has never really recovered from its never-ending debt crises. All of the above have serious implications for both Eurozone and U.S. banks, as the counterparty risk between financial firms is enormous.

Shaky U.S. Pension Plans
Many U.S. states and municipalities are one market correction away from going under water, as their pension funds remain underfunded and their budgets are deeply in the red.

Puerto Rico, Illinois and Massachusetts are glaring examples of budget failures, while pension funds covering everyone from Dallas police to New York State Teamsters are staring collapse in the eye.

Each of these entities is relying on a continued robust stock market to whitewash their underlying problems. Which brings us to the greatest risk of all facing investors in 2017's back half ...

An Aging Bull Market
After an eight-year bull market and gains of 9% or more this year, stocks could be poised for at least a retracement.

Such selling could very well start small, with retail brokers and investors ditching some stock to rebalance portfolios and lock in gains for the year. But the real problem would manifest itself if equities ever see a correction and the "buy the dip" crowd fails to materialize. That would lead to extended selling and a major market correction.

A Gold-en Opportunity?

Unlike the first two debt-related problems above, a stock-market selloff would generate cash that I would expect would move into safe-haven investments like gold. If that happens, the first order of business might be to preserve capital as stock's risk/reward ratio becomes further skewed.

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TheStreet Recommends

I put my faith in getting ahead of the curve and buying gold. I think many investors should buy some as well and enjoy what could otherwise be a very bumpy ride.

More Tips for the Second Half

Our July Trading Strategies roundtable and accompanying special report highlights lots of ways to invest over the next six months. Click below to check out:

  • This Is Your Investing Playbook for 2017's Second Half

At the time of publication, Williams was long physical gold and his company offers it for sale, although positions may change at any time.