The stock market's rally to new highs should give investors reason to pause as valuations are at historically high levels, according to Bob Smith, CIO and President at Sage Advisory Services. "We've come very fast, very quickly with a lot of anticipation and not much substance," he added. While Smith is cautious about putting new money to work, he does believe investors should make some changes to their portfolios. He favors value over growth, and domestic stocks over international. He likes energy stocks, and some REITS, which he says got oversold.