For all those bears out there it’s time to turn those frowns upside down.

At Deutsche Bank Private Wealth Management’s Capital Market Outlook breakfast in New York City on Wednesday, Larry Adam announced a positive outlook for equities, anticipating that the S&P 500 would reach 1400 by the end of 2011. The only thing that could derail Adam’s positive outlook would be a lack of confidence.

“Confidence is about building a self-fulfilled feedback loop,” said Adam, chief investment strategist at the bank. “You won’t get companies hiring if they don’t have confidence in the economy. And if consumers aren’t confident they won’t be spending.”

Adam also dismisses the idea of a bond bubble. Worries have been building that a combination of high valuations for U.S. bonds and large retail inflows would cause the bond bubble to burst.

Adam does think interest rates will rise this year to 3.5% to 4%. They shouldn’t be this low, he added.

Adam believes risk appetite will bring fund flows into the equity space. He estimates $250 billion in fund flows. Pension funds historically have a 55% allocation to equities, he said. Yet they are currently at 52%, leaving $750 billion sitting on the sidelines, which could go back into the equity marketplace.

Owen Fitzpatrick, Head of U.S. Large Cap and Small Cap Equity Teams, agrees that equities have never been in better shape. From a balance sheet perspective, he says, companies have substantial cash on hand. “Income statements are in fantastic shape in the midst of earnings season,” Fitzpatrick said. “This will be another quarter with earnings to the upside and when earnings are headed higher we see equities moving higher.”

Meanwhile, Fitzpatrick said, that Federal Reserve Chairman Ben Bernanke wants to see the equity market move higher, which he sees as a major shift. He also points to President Obama’s pro-business Op-Ed in the Wall Street Journal on Tuesday as a positive sign for equity markets. “Wait for the State of the Union address,” Fitzpatrick said. “Every time Obama says ‘deficit reduction’ we will see a boost in equity markets. I think that’s the direction we are headed”

Fitzpatrick also made it clear that if Obama wants to run for president in 2012, which he has signaled he does, he will need to reduce unemployment to below 8%.

Adam pointed to emerging markets as a good investment in 2011. “Look at global multinational companies that have a growing revenue stream in the emerging markets,” he said. He expects both financial and healthcare services to be strong, as well as energy. “These countries will need fuel to power cars and better healthcare. As wealth increases, currencies appreciate.”

Agricultural commodities are expected to be robust as individuals in emerging countries increase beef consumption. “For every 1 kilogram of beef you need, you need 8 kilograms of grains,” he said. “That continues to put nice solid fundamentals under agriculture commodities.”

But don’t focus solely on the BRIC nations, said Fitzpatrick. “In many ways those economies have already emerged. Look at the truer emerging markets in the space: Korea, Taiwan, Israel, Egypt, Poland, and Peru.”

Adam ended by saying it’s not his strategy to be overly optimistic or overly pessimistic. “It’s my strategy to be a realist.”

“I don’t think inflation is a major problem right now, but 3 to 5 years from now it will be. Labor and wages are going up in China and eventually they will have to pass those costs up. The typical inflationary protection vehicles, such as real estate that were good bets in the past, are not good now.”