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Picking Stocks...Over Bonds

Seventy percent of Hugh Johnson's portfolio is in stocks — and that's where his money is staying, he says.

The chairman and chief investment officer of Johnson Illington Advisors says fixed-income investing has some significant dangers about which the casual investor may not be aware.

J.J. Burns of J.J. Burns & Co. is undeterred: he's sticking with bonds for now.

"I'm going to go where the value is, and if bonds have a little bit more value right now than stocks, I'm going to have more of my portfolio there," he told CNBC.

Compare for yourself:

Johnson said that could be treacherous in the current credit climate.

"You've got to be overwhelmingly careful about credit," he said. "Don't forget, the economy is contracting, and contracting at a very rapid rate, and you have to be careful about the possibility of defaults. This is not as easy as it looks."

Johnson acknowledges that there is money to be made in the bond market as well as in stocks — and he gets no argument from Burns in the long run.

"I still do believe, long-term, stocks will outperform," Burns admitted.

Johnson thinks a bottom has been established in equities.

"When you have everybody sort of throwing the baby out with the bathwater, widespread pessimism, stocks that are undervalued, you can make a pretty good case that the worst might be over," he said.

But, he added, "You can't make a very strong case, in my judgment, that we're about to start a new bull market."

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