The stock market rally is, for the most part, under-appreciated, something Caruso said is also a good thing.
“If everyone was euphoric, I’m out,” he said.
Negatives in the economy for 2014 include the continued political mess in Washington, Europe and emerging markets that are “still stuck in the mud,” and “needless to say, the Fed just started their tapering (on the stimulus program).”
Long term, it appears the numbers on the charts are moving in the right direction. Stocks could do about as half as well as they did this year, which translates to 10 percent to 15 percent returns, Caruso said, and “we expect you to do nothing with bonds,” as higher interest rates will make them less attractive.
That said, Caruso said opportunities in 2014 may be investments in international and emerging markets, or small company stocks.
With people starting to spend again, consumer businesses that depend on discretionary spending — such as the local shopping malls — may do well. With that increased spending, industrial companies that make the basics — such as General Electric, DuPont and 3M — should also do well in 2014. Technology should also continue to do well, but for the average investor, social media companies like Facebook or Twitter may be too speculative to invest in.
Finally, Caruso said, financial and health care sectors should also continue to perform well in 2014 — sectors that are well-represented on the North Shore.
Staff writer Ethan Forman can be reached at 978-338-2673, by email at email@example.com or on Twitter at @DanverSalemNews.