Pimco: Why the 'great rotation' to stocks won't happen

Although buyers should stay away from longer-duration bonds, there is an important group of investors who are simply turned off to market volatility and won't rotate their cash from fixed income to stocks, Tony Crescenzi, market strategist and executive vice president at Pimco, told CNBC.

"One of the important things for investors to do while the Fed is reflating a deflated economy is to avoid longer-dated maturities. We wouldn't expect a meaningful rise in rates from here and there has been a substantial move already," Crescenzi told "Squawk on the Street" on Friday.

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With much of American wealth concentrated at the older end of the country's population, Crescenzi said that it is hard to imagine that they would want to put money back into more volatile assets like stocks.

"We wouldn't expect a meaningful rotation for older Americans," he said. "Things look good, but underneath the surface there is this fragility that makes people nervous so they want to be higher in the capital structure."

Fears of stock market volatility after what happened in 2000 and 2008 will keep much of this wealth out of stocks, he said, and even with a rising market, this group of investors is simply not interested in equities.

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—By CNBC's Paul Toscano. Follow him on Twitter @ToscanoPaul and get the latest stories from "Squawk on the Street."