Out of all of his forecasts, the one that sticks out among Robert Doll's "2014 Ten Predictions" is that the stock market will perform admirably - after suffering a 10 percent correction.
In an interview, Doll, the chief equity strategist at Nuveen Investments, based in Chicago, said he expects U.S. equities will record another good year in 2014 - but that 2013 may have "stolen" some returns from this year.
"Last year wasn't normal," Doll said. "The market just went straight up. This year will be more volatile and bumpier.
"We expect gains to be less ebullient and more volatile. While expectations of high single-digit or low double-digit percentage gains are not unreasonable, we also think a noticeable pullback some time during the year is likely to be caused by overbought conditions."
Doll works out of Princeton. A graduate of Council Rock High School in Bucks County and Lehigh University, Doll went to graduate school at Wharton. He also has three children who are current or future University of Pennsylvania alums.
Doll veers from the consensus on municipal bonds. He is quite bullish and thinks local governments and other issuers are witnessing better tax revenue growth. The muni sell-off is overdone, he believes, and munis will outperform taxable bonds in 2014.
Among stocks he owns in Nuveen's large-cap value mutual funds are cyclical companies (Boeing, Northrop Grumman, Raytheon), and "cheap tech stocks" (Microsoft, Oracle and Hewlett-Packard). He also holds health-care companies Pfizer, Medtronic and UnitedHealthcare.
Doll has trimmed energy holdings such as Chevron and refiners, and is bearish on utilities. He also likes media stocks and holds Comcast, DirecTV Group and Viacom.
"They have high free cash flow and the companies are being managed for shareholders," Doll said. He is neutral on financial firms such as big banks, but still holds JPMorgan Chase & Co. and Goldman Sachs.
In his long-short portfolios, Doll is shorting - betting the price of the shares will fall - utilities, homebuilders, "anything with declining revenues, falling profit margins, and expensive valuations."
Some other predictions:
The U.S. economy grows 3 percent as housing starts surpass one million.
Employment hits an all-time high.
Ten-year Treasury yields move toward 3.5 percent as the Federal Reserve completes tapering and holds short-term rate near zero.
The U.S. dollar appreciates as U.S. manufacturing improves.
Republicans increase their lead in the House but fall short of capturing the Senate.