Sure, investors still feel nervous, companies are hesitating to spend cash, and all attention is on fixed income and bond funds. ButNeil HennessyofHennessy Fundsinsists equity mutual funds are the way to go.

Meanwhile, most investors are concentrating on bond and fixed income funds. Fixed income enjoyed more than $1 trillion in flows this year. In contrast, equity funds have seen around $500 billion in outflows.

But Hennessy stressed the potential of equity funds, warning against pooling too much money in a limited selection of popular sectors.

"When everybody starts to go one way, that's not where you want to be, especially in a near-zero interest rate environment," said the chief investment officer and portfolio manager of Hennessy Funds, during a press luncheon in Midtown New York today.

But investors may not see real action until after companies have "received clarity" from the government regarding a number of key issues affecting the industry, not least of which is the fiscal cliff, said Hennessy.

And Hennessy's thoughts on the fiscal cliff?

"Personally, I think [the government] should let [the U.S.] go over the cliff," he said, explaining that the government needs more time to reach a compromise on potential tax increases. "People think I'm crazy," he said.

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