“Emotionally, it is very easy to give up on the concept of superior equity returns for the long run and succumb to the soothing mantra that bonds will never hurt you. Logically, it has never been more important for investors to take the other side of the trade,” Kelly added.
“Entering 2012, the outlook is foggy with potential upside surprises as well as downside ones. However, financial markets appear priced for the worst of all worlds. Because of this, despite its underperformance in 2011, the case for adding risk or at least achieving balance in 2012 is a good deal stronger than it was a year ago,” the strategist concluded.
iShares Barclays 20+ Year Treasury Bond Fund
