(1) RISK VIDEO. That's a big Japanese investment house talking (Nomura). This is their HOPE, a particular TYPE of risk-off. They want the dollar to go up, so the Japanese yen, already too high, won't have to go up, causing more damage to the Japanese economy.
Secondly, their expecting a switch out of stocks to "Risk off" (safe bonds & cash) implies people have not already switched to bonds. That could be true in Japan, but its not true here.
You can EASILY argue that investors have already switched, did so last July-Aug-Sept 2011. That's why bond yields are so incredibly low now.
(2) EVIDENCE. Look at Lipper Research's monthly reports to see when massive outflows from stocks to bonds happened last year. How many billions? It was HUGE! Nothing like it the year before or after!
Also, chart ^TNX ($TNX at scottrade), long-term, to see what has happened to yields on 10-year US Treasuries. These are the queen of "risk-off" AFTER money markets and CDs and short-term treasuries were driven to near zero yields long ago. (Divide ^TNX by 10 and you get an interest rate as a percentage, between 1.5% and 2% at its recent lows.)
(3) WHAT INSTEAD? We will have to watch to be sure, but dividend stocks with forward P/Es equal to or lower than APPL's are one group that can flower. IMPORTANT: Their yields will go up as they grow, whereas the better bonds have fixed yields.
Change the comparison to homebuilders, and an even larger set has lower forward P/E's than have the homebuilders. These will look really good if they have dividends.
There are many choices. For example, Ford at $10 has a solid 2% yield, which could grow in a year or two. F thus looks very good compared to 10-year US Treasuries with yields at 1.55-to-2.5% in recent months.
Secondly, eople have been TOO "risk off" for international stocks. Lots of forward P/Es thus are too low for big corporations based in the US that operate worldwide. That's despite more companies having good cash cushions, to help protect against emergency.
What thinking error is made? That those companies are only in Europe, when in fact most of their earnings are elsewhere.
Third, stocks with lowish institutional ownership may look good. In many counts, "institutions" are defined broadly, to include funds.
Institutional/fund ownership being lowish (under 70% or even under 60%) means that many funds have ALREADY dumped those stocks.
Finally, consider those stocks with low "short interest". The institutions still owning them are NOT willing to lend them out. That's a "risk-off" strategy for themselves.
What's "risk-on"? Lending shares or selling calls to professional shorts with HFT machines??
Such shorts have gotten very good at dumping and taking price down. This will often produce a sharply de-valued stock after the shares are bought back at an over-kill low and returned!!
Just one person's opinion, but have been thinking about all this for months. (Since Aug 2011, have done research to try to unwind the causes of the 2011 take-down going way, way too far for F and its warrants, overkill.)