For the first quarter of 2014, I am not expecting another stunning, positive market return as we saw last quarter. In fact, I think the quarter could go in either direction. Two major U.S. issues are what I believe will influence how the market goes. First, the U.S. has an upcoming debt-ceiling limit it must address. The debate will likely be in full swing by February. Will Congress continue its bi-partisan agreement or will the debate get ugly? We shall see. The second major issue is the implementation of the Affordable Care Act (ACA) otherwise known as Obamacare. The rollout of this huge program has been challenging to say the least. Executive orders to adjust the Law's details are adding to the challenges and emboldening the Law's opponents into legal action. The Supreme Court currently has one component of the Law on "hold" as it waits to make a final ruling. The economic, social and political fallout from the healthcare law should not be underestimated. It is impossible to know how these two issues will evolve.

With two back-to-back years of positive stock market performance, there is always a chance for a correction. I think it is likely to happen sometime in 2014. However, I don't see a major catalyst at this point with the possible exception of the two issues discussed above. That said, defensive measures, be it holding cash or specific hedge positions, is something investors should consider. My equity strategy is to remain invested being neutral on U.S., underweight International and overweight Emerging Markets. For fixed income and alternatives investments, I am holding steady with current allocations.