It's time to remind you to avoid owning bonds for the next few years, with the one exception, and that is zero coupon bonds which you should certainly have as insurance.

I dislike bonds in general is that today's climate reminds me of the past. As the saying goes, while history seldom repeats, it often rhymes. Looking back through history I see a resemblance between now and 1965. Observe that in 1965, bond yields were at around 4.5% while headline inflation was close to 2% year-over-year. The fifteen years that followed, until 1980, were catastrophic for bonds, and very good for the investments of gold, silver, commodities, and oil.

Because this is not 1965, we also recommend you own securities that are leveraged to growth in the developing world. China and India and other developing nations are carrying the economic ball today and that will be what keeps growth strong. The price for that growth, however, will be much higher inflation due to the demand they need for commodities for the next several years and well beyond that.

The Dow Industrials hit an all-time high. Transports, on the other hand, are still a long way below their last high. Before we can be confident that a bull market is in place, Dow Theory says it's important to have a confirmation in Transports, especially since the Transports are a far better indicator of the domestic economy than the Dow Industrials. Transports reflect goods being shipped. And while they used to be a segment of the U.S. economy, they now indicate how the U.S. is doing compared to the rest of the world.

I feel the Transports will perk up a little in the weeks ahead, and with that in mind I like Burlington Northern (BNI), and UNP Union Pacific railway companies which could do very well in today's market.