Investors should shake up their portfolios to make room for more equities going into 2011, says Charles Schwab, founder and CEO of the investment firm that bears his name.
"They should really re-establish their asset allocation at the beginning point, from probably 70 percent or 80 percent cash or fixed income and 20 percent securities and equities," Schwab tells Maria Bartiromo, according to USA Today.
"Not only do you get the benefit of the growth of these U.S. growth or international companies, which I encourage people to consider, but it's probably the best and only real place today for some protection against inflation, which we all know is lurking."
Only those in their sixties should be heavily exposed to fixed income, Schwab says.
“The massive amount of money in fixed income is hitting the crescendo point," Schwab says.
"Which means the next 20 years it will shift the other way, and long-term fixed-income investments will have a tough time because they'll be swimming upstream all the time."
Many other experts see stocks as a good investment despite debt woes in Europe, high inflation in emerging-market economies and hefty borrowing in Washington.
According to an Investors Intelligence sentiment survey reported by the Wall Street Journal, the percentage of advisers calling themselves stock-market bulls hit 58.8 percent on Dec. 22, its highest level since October 2007, when it reached 62 percent.
Still, one dark cloud on the horizon can wipe out equity gains, as seen when the Standard & Poor's ratings agency downgraded Portugal in April.
"With everyone so bullish, you have to be damn careful here," says Peter Boockvar, an equity strategist at Miller Tabak & Co.
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