If there's one thing you can count on from Mr. Market, it's that he rarely rewards the masses. That's a succinct way of saying that you should be skeptical about embracing widely held beliefs.
"When there's a large consensus view, the market seems to find a path that will cause the most pain," says Keith Wirtz, chief investment officer at Fifth Third Asset Management.
Wirtz identifies interest rates and the Euro as his top two areas that could surprise the most people next year and unfortunately inflict a lot of pain.
"Bonds surprised everyone (this year) by doing better than stocks; as we look in to next year we think the reverse is going to happen," he explains, adding his doubt that bonds will have two-years of competitive results.
At the same time, if you know of a Euro bull out there, who is not running a government or employed by a central bank, I'd like to meet him. Which is exactly why Wirtz has flagged the world's most hated currency as a shocker of the year candidate, since "everyone is shorting the euro."
At the same time, Wirtz blunty adds "we love stocks." He says it's not only because he doesn't like bonds, but more for the relative fundamental and valuation attractiveness of equities. In the attached video, he sums the whole situation up in a nice little Christmas bundle an then slaps a big old "10-10-10" label on top.
"Stocks are giving us a 10% return potential, stocks are going to enjoy fundamental earnings growth of around 10%, and stocks are priced at around 10 times forward earnings," Wirtz says. "We think that's a great theme for investors."
The one constant he sees as we get set to flip the calendar to 2012 is that political risk, both domestic and abroad, will remain with us. But with his expectations for a rebound in risk assets, as well as slow positive growth rather than recession, Wirtz simply says, "we're leaning on stocks."
Are you bullish on stocks for 2012? Let us know in the comment section below.