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Outlook 2014: Are we in the eye of the storm?

The bottom line

“The sky is falling.”
           –Chicken Little

The first time Chicken Little screeched that, he put everyone in a panic. When the sky didn’t fall, he lost credibility. Eventually, he proved to be right. Bears who are growling that the market is falling apart and that the extraordinary policies of the past few years cannot end well are sounding more like Chicken Little than scholars. We think 2014 will be another year where the sky doesn’t fall.

Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses.

The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index, with each stock’s weight in the index proportionate to its market value. You cannot invest directly in an index.

The views expressed are as of 12-17-13 and are those of Chief Portfolio Strategist Brian Jacobsen; Chief Equity Strategist John Manley; Chief Fixed-Income Strategist James Kochan; and Wells Fargo Funds Management, LLC. The information and statistics in this report have been obtained from sources we believe to be reliable but are not guaranteed by us to be accurate or complete. Any and all earnings, projections, and estimates assume certain conditions and industry developments, which are subject to change. The opinions stated are those of the authors and are not intended to be used as investment advice. The views and any forward-looking statements are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally, or any mutual fund. Wells Fargo Funds Management, LLC, disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.