With a variety of assets — from stocks to bonds to gold — up significantly this year, two top asset allocation strategists are urging a conservative approach heading into 2010.

“There isn’t that much to be excited about,” GMO’s Ben Inker tells the Associated Press. “It’s going to be tougher in 2010, because we’ve had this big flow into risky assets. They were all cheap last winter, but they’ve all gone up 60 percent-plus.”

Inker says both stocks and bonds have some major factors working against them. Continued stock gains are contingent on corporate profits and profit margins rebounding quickly, and Inker says he’s worried expectations have gotten too high. “They’re saying that by two years from now, things will be as good as the best time ever to have been a U.S. corporation. That doesn’t seem plausible,” he says. “The economy is trying to work through too many problems now to believe things are going to be that good.”

But that doesn’t mean investors should go headlong into bonds. Inker is concerned that the ballooning deficit may be leading to major inflation, which can wipe out a big chunk of bond returns. That’s why Inker currently likes Treasury Inflation-Protected Securities in the bond market, AP reports. In terms of stocks, his firm likes big blue chips like Coca-Cola, Johnson & Johnson, and Microsoft. Such solid, well known firms “have less to worry about if the recovery sputters out,” Inker says.

Rob Arnott of PIMCO says he’s also having trouble finding values in the stock and bond markets. “I think this is a wonderful time to hunker down,” Arnott told AP, “and take a very conservative investment posture.”

Arnott says the stock market is “expensive, and priced as if the recession is over.” And in the fixed income arena, he is high only on short-term Treasury bonds, favoring those with maturities of a few months to just a couple of years, because he doesn’t think inflation won’t rise much above its near-zero level anytime soon, AP reports. He does think we’ll see inflation of 3% or so by 2011.