As I’ve stated multiple times here recently, stocks today, in my view, are no longer cheap, nor are they expensive. Meaning, if earnings pick up next year against a backdrop of a growing economy and low inflation (yes, the inflation measures are debatable), next year could be decent. And of course, as always, it could be ugly, for reasons we’ll only know in retrospect.

The logical question heading into 2014 has to be, forgetting valuations for the moment, who the heck would buy stocks while the major averages are at all-time highs? Well, sadly, an even more logical question probably wasn’t asked enough back in March of 2009, which is, who the heck wouldn’t buy stocks while the major averages are at multi-year lows?

The answer, alas, to both questions is the same. A good number of the folks who will buy equities here will be those who wouldn’t buy them back when they were dirt cheap. Stocks are those curious things that few seem to want when they’re on sale.

If you’re our client, and this bull market rages into a red muleta-wielding matador of an economy next year (that is, if stocks continue to rise) you’ll be accommodating those folks as we sell your holdings back to your target allocation at your rebalancing dates. Should the bull fall prey to an unseen lance, you’ll be accommodating the exiters as we buy our way back up to your target at those rebalancing dates. Bottom line: you never want to be the answer to the above questions. Although, you could be a buyer here to the extent you, for some reason (came into some cash perhaps), find your portfolio below your target to equities.

If you haven’t yet, please take a few minutes and read our year-end investment letter (it’s very important that you maintain a healthy perspective going forward)…