Stewart Richardson wants to keep his clients away from the punch bowl.

Richardson, a comprehensive financial planner with Sun Ray Advisors of Owings Mills, Md., sees “a lot of people getting drunk on the punch of the returns they’ve gotten the past two years from the stock market.” He fears that they “may be feeling overly confident in their pursuit of returns and their willingness to accept risk.”

Among new clients, Richardson has encountered people invested virtually 100% in equities—which he considers a big mistake. “Returns are trumping discretion,” he says.

Part of the problem, he notes, is that clients reject investment-grade fixed income because the returns are so low, opting instead for equities or much riskier bond returns. He tells them instead to take their risks in the equities markets—not on the bond side—and to treat fixed income as “ballast” for the rest of their portfolio.

Richardson, who has a strong conservative bent, typically follows a passive investment strategy and doesn’t try to time the market or pick winners. “We have no idea which asset classes will do well next year,” he says.

However, he’s also keenly aware that interest rates are at historic lows. And while he won’t encourage clients to boost their returns by investing in junk and other issues in the nether regions of the bond market, he has taken steps to limit their exposure to longer duration bonds. Normally, he likes to see the bond portion of his clients’ portfolio evenly divided between short-term and long-term index funds, but for the time being he’s tilting them towards the short side.

One alternative to long-term funds that he likes are Series I savings bonds, which are currently returning around 1.18% and provide some safeguards against inflation.

To increase their exposure to fixed income, Richardson also has all of his clients open one or more online bank account, since these are FDIC insured and—because of their lower cost structure—provide slightly higher rates of return (currently between 0.8% to 1%.)

Since most of his clients have their major assets tied up in 401(k)s and other retirement accounts, Richardson is always looking for safe fixed income options that they can take advantage of. Right now, he says, GIC-backed funds are worth a look. These have very low risk and sometimes guarantee a minimum return.

Richardson also works to ensure that his clients have adequate cash on hand. He equates this to 20% of their mortgage or, if their mortgage is very small or they don’t have one, 6 to 12 months-worth of living expenses.