What Corporate America decides to do with its piles of cash could determine whether stocks have another banner year in 2014, the chairman of S&P 500 Index Committee told CNBC on Tuesday.
On the last trading day of the year, David Blitzer of Standard & Poor's opined on why companies are still unwilling to take the kind of risks that would kick the economy into a higher gear.
"What are they doing? They're buying back stock because they're worried about dilution from stock options," Blitzer said in a "Squawk Box" interview.
"I'd rather see them put that money to work. That's where we got iPhones, and that's where we got everything else we like. We just need another round of that."
(Read more: The great Google, Facebook and Apple cash pile)
Companies aren't making interest on all that cash because of the historically low rates, he pointed out. "Instead of the capitalists sitting there and worrying about uncertainty, they're supposed to take calculated risk, make bets and turn the cash into a bigger economy. That's what we're waiting for."
Aside from the corporate investment issue, Blitzer contended that stocks may have a tough time repeating their gains next year.
If the Dow Jones Industrial Average can end 2013 on Tuesday with a modest increase, it would chalk up its best year since 1995. The Dow gained 25 percent before the final session of the year. The is on track for its best year since 1997 with about a 30 percent gain. The Nasdaq Composite Index has risen 37 percent in 2013—its best year since 2000.
(Read more: Stocks and 2013: A profitable year to remember)
"One thing that concerns me is profits as a share of GDP are at record highs," he said. "I think we may have a little mean reversion" next year.
But January has traditionally been a positive month for stocks with the Dow gaining an average of 1 percent during the last century. The blue chip index has also been positive more than 60 percent of the time for the first month of the year.
If January ends up in the green for stocks, it would be the fifth-straight month of gains for the Dow, the S&P, and the Nasdaq. June and August were the only negative months in 2013.
The financial markets will closed Wednesday for the New Year's Day holiday with trading resuming on Thursday.