Treasury Bonds had another impressive year, with the 10-year Treasury note returning about 4.4% year-to-date, despite several gurus talking about the bond bubble burst. Bond yields may finally rise in 2013 as the macroeconomic situation improves, even though the Fed will maintain the rates near zero at least until the unemployment rate drops to 6.5% or inflation exceeds 2.5%. They will also continue massive purchases of bonds.

On the other hand, no deal or a bad deal on the fiscal cliff front may push the investors towards “safer” assets again.

Stock Market is up about 15% year-to-date. Economy will probably continue to muddle through for most part of 2013, though unemployment may not come down significantly. Considering the situation in most other parts of the developed world and historical valuations, U.S. stocks look pretty attractive. And if the policy makers strike a nice deal on the fiscal cliff front, the stocks will continue their uptrend.

Gold: Gold is on track to gain about 7% this year, yielding positive returns for the twelfth year in a row. Though the precious metal lost some of its shine recently, many view the decline as a buying opportunity. As the Government printing presses continue to run overtime, gold may benefit as an inflation hedge. Also the central banks of the emerging countries are likely to continue their gold purchases in 2013.

Emerging Markets - While the broader MSCI emerging markets index is up about 16% year-to-date, some of the ETFs tracking smaller emerging markets like Turkey, Philippines, Egypt, Mexico and Thailand have returned more than 30% this year so far. Further China and India now seem to be bottoming out and may post a much better performance in 2013.

Which of these will shine in 2013? Please share your thoughts.

A) Bonds

B) US Stocks

C) Gold

D) Emerging Markets