After five years of underperformance, look for emerging market equities to outperform U.S. stocks this year, said Darell Krasnoff, managing director of Bel Air Investment Advisors.

"Emerging market valuations are cheap relative to the developed world and their economies are growing faster," said Krasnoff. "That combination will generate impressive returns in the intermediate term."

Back home, Krasnoff expects modest but positive returns for U.S. equities this year. While he does not see a crisis around the corner, Krasnoff does believe that the contentious presidential campaign will create additional volatility in the stock market.

"The election will likely bring about more volatility than usual, given the uncertainty and negative rhetoric toward Wall Street and trade," said Krasnoff.

In terms of sectors, Krasnoff said midstream master limited partnerships represent an unusual opportunity to buy an out-of-favor category with large and growing cash distributions. In his view, oil should reach supply-demand equilibrium in the next 12 to 18 months, with prices rising to the $45 to $55 range.

"Pipeline stocks were crushed along with oil last year, even while their cash flow has grown in the past two years," said Krasnoff. "Yields in the group are over 9% now and certainly sustainable, considering their 3% to 5% growth."

Finally, Krasnoff is a fan of relatively illiquid alternative assets, especially in the real estate sector. Those can provide attractive rates of return.

"We target 12% to 15% in private debt, both corporate and real estate-backed, and a similar return for income-oriented real estate," said Krasnoff. "We like private real estate because publicly traded vehicles like [real estate investment trusts] are impacted more by yields rather than their underlying properties."

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