I think it is more likely that the fed buys all the US treasury bonds that exist than that they're going to work the opposite direction and start selling them. I have no concept of what the fed exit strategy would look nor does an investor or viewer need to have a concept because it is way out in the future. The fed is doing exactly the opposite. they're expanding their balance sheet. They're working on qe3 and qe infinity ... The next move is not the fed exiting. It is the fed continuing, and that's what we have to deal with.
This is a world where you have to get away from all of the types of traditional things that are largely still advocated which is index based. You can't own treasury bonds. You have to move into international bonds. I like for the first time in years bank debt type of funds where they invest in floating rate senior in the capital structure or corporate bonds which look relatively attractive versus traditional junk bonds and of course mortgage-backed securities around the edges that we're so expert in, and finally really safe dividend paying stocks and I mean really safe. I don't mean technology companies. I mean consumer product companies, Campbell's soup, Kraft.
I think if you're a buy and hold person, will you be disappointed. You will end up with something around 5% or so at best case. This is a market where buy and hold unfortunately is completely out the door. This is unfortunate because of all of these policy manipulations and these twin towers of risk (the u.s. deficit and the european situation), people have to be more active than ever before which is really difficult for individual investors.