Low interest rates are here to stay—at least for 2013, predicts Pablo Martinez, assistant vice president of global fixed income at CIBC Asset Management.
So, investors uncomfortable with uncertainty should favour fixed-income investments. They've been yielding positive returns and will continue to do so over the next year.
Read: Stick with fixed income
"Many investors will aim to get return both on and of capital by staying in fixed-income investments," he says.
Martinez also suggests decreasing investments in government bonds, which are currently offering lackluster returns due to issues like global, and politically driven uncertainty.
Read: Help clients buy bonds
"Invest more into the corporate bonds sector instead, which has been returning very well over the past four years," he says. "It will continue to provide good returns [over the next twelve months]."
Speaking about the global economy, he says it's difficult for markets to forecast what will come out of Europe since politics are heavily involved. The uncertainty is causing bond yields to be high.
While he thinks the situation in the Eurozone will evolve in 2013, he concedes it's hard to predict the eventual outcome. "Next year, Europe won't be in the same shape as it is today, but what shape it will take is extremely difficult to forecast."