With stock prices at new highs, how worried should investors be? Our views vary considerably from the sentiment of most investors. We are less concerned with a dramatic change in central bank policy, but see anemic economic growth and overly stretched stock valuations as a key challenge. The reason we aren’t overly worried about the Fed is because even with two months of slightly more reassuring economic data under its belt, the central bank decided to cut back only by $10 billion (out of $85 billion) a month. More importantly, the Fed’s bond program is only a very small part of its overall support operations. Finally, the Fed and other central banks continue to signal that they are committed to keep short-term interest rates near zero for considerable time. The bottom line: fears of a change in Fed policy will sporadically ignite and ease off through 2014, as the central bank continuously adjusts its rhetoric. We believe a defensive multi-asset strategy, bolstered by a high degree of liquidity, will continue to generate decent returns.