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Momentum has carried the stock market to record highs in 2013. Many expect the upward trend to continue into 2014. The improving domestic housing scene, still-low interest rates, tell-tale signs of life in Europe, and a less worrisome outlook for China will sustain the market's momentum in the New Year.

I don't buy into this otherwise appealing narrative. My reading of the economic and corporate fundamentals leaves me with a far more cautious outlook for 2014. It has been an easy ride thus far in 2013 but 2014 will require a sound strategy, and a rigorous stock selection model.

That is exactly how we have designed the Top 10 Stocks for 2014. We are not hunkering down in a defensive posture by loading up on stocks from the utility, telecoms and consumer staple sectors. Our our best stock picks for 2014 represent a fair amount of deliberate and calculated offense through exposure in the finance, consumer discretionary, industrial and other sectors.

We did an excellent job in 2013 and 2012. The Top 10 portfolios for both years handily beat the broader market. The Top 10 Stocks for 2012 nearly tripled the S&P 500, with the portfolio returning +31.7% vs. +12.1% returned by the S&P 500.

The Top 10 portfolio for 2013 has returned +31.1% through the end of the third quarter, beating the S&P 500's +19.8% return in the same time period. The portfolio has further added to is lead on the market in the first two months on Q4 and remains on track to finish the year in style.

There is obviously no guarantee that we will be able to repeat our past outperformance in 2014. Our robust stock-selection framework in place puts the odds in our favor.

The Top 10 portfolio follows a year-long buy-and-hold strategy. We retain the flexibility to make mid-course correction to respond to unforeseen market conditions. The idea is that if the macro framework turns out to be different than what we expect or the outlook for an individual company turns negative, we will stay ready to make change(s) during the year.  Click here to learn more about Zacks' Top 10 Stocks for 2014.

Have a prosperous 2014.

Sheraz Mian

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