Russ Koesterich, the chief investment strategist at BlackRock, empathizes with investors who are skittish about the stock market. But, he said, they really have no choice but to buy equities.

"If someone asked me, how would I describe my position going into 2014, I'd say that I'm a nervous long," he told "Futures Now" on Thursday.

People have good reason to be on edge, Koesterich added.

"I think that people should be a little bit more nervous," Koesterich said. "It's good to have that fear, because the reality is that we've had big gains, and those gains were mostly predicated on multiple expansion."

Looking ahead to 2014, "you are going to have an environment where volatility is higher," he predicted. "I don't think it's going to be as easy just buying the U.S. market and going to sleep, and I think we are going to see differentiation among the different parts of the market."

But the alternatives are worse.

"Look at bonds, they're still expensive, and cash is still paying zero," Koesterich said. "We still think that stocks look attractive relative to the alternatives."

Still, he doesn't expect to see anything like a repeat of this year's fantastic gains.

"If you had another year like [2013] in 2014, I think you would be taking the U.S. market into overvalued territory," Koesterich said. "So our outlook for 2014: more gains, but a more muted year than we had this year."

—By CNBC's Alex Rosenberg. Follow him on Twitter: @CNBCAlex.

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