With U.S. stocks near record highs, bonds represent a more attractive investment now, says Lawrence McDonald, senior director at brokerage firm Newedge.

"Complacency is very, very high [in the stock market] right now," he tells Newsmax TV in an exclusive interview. "But the thing that gets me the most concerned is during the great equity runs in the '90s and the '80s, very few people were heading into retirement."

That's not the case today. Every day in this country, 4,100 people are turning 65, up from 1,000 to 1,100 a day 10 years ago, McDonald says.

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"Bottom line is people 65 and over really have to have a good chunk of their money in bonds. So this great rotation [from bonds to stocks] will happen over time, but it's not going to be this easy lay-up back into stocks."

Editor’s Note: Obama Blunder Spawns Massive Profit Opportunity

McDonald believes the 10-year Treasury yield is headed back down to 2.2 percent from 2.58 percent late Friday.

And what's going to push it there?

Oil has moved up $22 from its lows over the past four to five months, and that takes off about 0.5 percent from gross domestic product growth, he explains.

"Then you just have everything that's going on with sequestration, the rise in taxes, the amount of young people that aren't working," McDonald adds. "There are just a lot of secular problems with the economy that will rear their ugly head more in the second half."

To be sure, sell-offs in the stock market will represent good buying opportunities, he maintains. "You want to sit in the boat and wait for some fear, and that's when you want to get in," McDonald says.

"On Nov. 16, the market was way down, about 7 percent from the highs. That was a great time to buy. Even a couple months ago — May 22 to June 24 — the market dropped almost 8 percent."

McDonald, whose website is www.lawrencegmcdonald.com, uses a three-prong buying approach. "Say we're down 5 percent, take a stab, down another 5 percent, another barrel. And then go with the third barrel," he says.

"You remember the movie 'Jaws?' Jaws tried to go under the boat, and [Quint] said, not with three barrels he can't."

As President Obama reportedly narrows down his choice for the next Federal Reserve chairman to Fed Vice Chairwoman Janet Yellen and former White House economic adviser Lawrence Summers, McDonald is concerned about politicization of the Fed.

That's already happening overseas — in Japan and the United Kingdom, he argues. In the United States, "if Miss Yellen is approved, she's extremely political," McDonald claims.

"Larry, actually, he's more of a hawk. He doesn’t appreciate [support] the risks that are building up in quantitative easing." By contrast, "Miss Yellen, she'd rather buy $85 billion a month for the next couple of years," McDonald contends.

Editor’s Note: Obama Blunder Spawns Massive Profit Opportunity