I believe that U.S. equity markets will do well in 2013 because of a few significant tailwinds.
The important one is the resurgence of the U.S. housing sector. Buoyant real estate prices should provide a decent lift to both the employment picture and to consumer confidence. (Read More: Pending Home Sales Rise 1.7 Percent, Beating Forecast.)
Additionally, positive developments in China and Japan could also provide fuel to the "risk-on" trade.
In addition to stocks, I also like gold and silver. These are inflation hedges, which is useful in light of a global central bank mentality of using accommodation as the first line of defense against a slowing economy. (Read More: Gold Steady Amid US Fiscal Drama .)
These developments should also support both crude and copper prices in the new year. I also expect the Canadian dollar to fare well in a commodity-driven risk trade.
At some point in the next few years, the U.S. runs a very real risk of having markets lose confidence in our ability to pay our bills, and this could cause an enormous sell-off in long-term treasuries. It's unfortunate that the timing of this occurrence will be very difficult to predict. Because of this, I will look at very cheap option strategies that will protect against sharp moves in long-end treasuries.
