Last week, we highlighted James O’Shaughnessy’s take on why investors are making major asset allocation changes at just the wrong time.

This week, O’Shaughnessy tells the Financial Post of Canada that he thinks “the market is returning to rationality”, and that over the next ten years equities will be one of the best-performing asset classes. “We think the new ‘bubble’ is in treasuries and other bonds,” O’Shaughnessy says. “We continue to advise that investors remain committed to a patient, long-term outlook and that the best way to do well in stocks is to use a disciplined, time-tested strategy that has the benefit of empirically tested results over a variety of market environments.”

O’Shaughnessy also talks about the financial crisis, and how he and his clients responded to it last year.