Street Signs

Investment Guru: "Treasuries Will Perform"

Robert Kessler has some strong opinions about stocks and bonds -- and he's not shy about sharing them. The president of Kessler Companies told CNBC's Erin Burnett that it's a "very exciting period" for Treasuries.

Speaking on "Street Signs," Kessler agreed with Burnett's assertion that T-bills can be a "very sexy investment," with the potential for 20% returns. The investment advisor explained that Treasuries "work simply," reacting "almost directly" when rates go up or down.

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Kessler chides many investors who "don't see Treasuries as an asset class," but rather "as a proxy to stocks." His firm reports that when construction payrolls sink, average annualized returns for the S&P 500 are 9.76% -- while the Treasury Composite Index averages 12.02%.

Back to rates: Kessler opined that the housing situation may actually bring about a "hard landing," but that "the worry today is about unemployment." He maintains that if construction unemployment continues edging up, "the Fed will react." But there's a bright side: Kessler declared that rate cuts may help or hinder stock prices -- but "lower rates mean Treasuries will perform." Period.