Market Insider

2014 themes: Chasing returns and rising interest rates

The new year will have stock investors looking for earnings growth amid rising interest rates, while those who missed out on Wall Street's multiyear rally will be trying to get in on the action.

"When we close the books tomorrow, this will be the first year since 2007 where we had positive equity flows for the calendar year," said Darrell Cronk, regional chief investment officer for Wells Fargo Private Bank. "It has been a great year for stocks and not such a great year for bonds; we expect that trend to continue in 2014."

Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, said, "Chasing returns is not a good reason to invest, but when enough do it, the short-term impact is more buying and higher prices. Absent large-scale profit-taking or an incident, we may see another inflow of funds and another short-term uptick from investors chasing profits in the first few weeks of the year."

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