2014 Is Looking a Lot Like 2013 After a banner year for stocks and a rocky one for bonds, market forecasters are remarkably consistent in their forecasts for 2014: more of the same. Most forecasters are warning stock investors not to expect another year of 30 percent gains, as there was in the Standard & Poor's 500-stock index in 2013. The average forecast is for a 6 percent rise in the S.&P. 500, according to Bloomberg. But the two analysts I selected for this column - Abby Joseph Cohen of Goldman Sachs and Bill Miller of Legg Mason, both of whom were remarkably accurate about 2013 - said another year of strong double-digit gains would not shock them. "We could easily see gains of more than 20 percent" in stocks, Mr. Miller told me. And the market wouldn't be overpriced at that level. In the many years I've been surveying experts for their predictions for the coming year, I cannot recall another time when optimism about the stock market, the economy and corporate profits was so widespread. As is pessimism about the bond market. The stock market's relentless rise this year seems to have tamed all but a few perma-bears. When the Federal Reserve said in September that the economy was too weak for the central bank to taper its purchase of securities, stocks went up. And when the Fed said in December that it would begin to taper - stocks still went up. The only thing that seemed to stop stocks" inexorable rise was Congress's self-destructive gridlock, and even that didn't last long. Still, such unanimity may be the most worrisome portent for 2014. As Karl Case, emeritus professor of economics at Wellesley College and a co-founder of the S.&P./Case-Shiller index of housing prices, put it, "When everyone expects something to happen, that's when it doesn't." But neither he nor anyone else I consulted this year was willing to break ranks with the consensus. "It gives me pause" Ms. Cohen, senior investment strategist for Goldman Sachs and president of the Global Markets Institute, said, referring to the bullish herd mentality that has gripped Wall Street. But there's no reason to be a contrarian just for the sake of being contrarian. I look at the fundamentals. Even after such a strong year in 2013, I think it will continue. Ms. Cohen was almost exactly right a year ago, when she predicted the S.&P. 500 would end 2013 at 1,787. It closed at 1,848. At the time, her forecast seemed wildly bullish, especially since stocks were at near record levels, and had registered gains four years running. "There was a significant mispricing of assets a year ago," she said, referring to both stock prices (too low) and bonds (inflated). That's not as obvious now that stocks have gained. "There's something artificial about current asset prices," she said, "which have been largely driven by liquidity. But we've begun a transition to valuations that are driven by fundamentals. And those, she said, are strong. She cited an expanding United States economy, higher job creation, gains in labor productivity, lower energy prices and subdued inflation. "This will provide staying power," she said. Goldman Sachs's baseline forecast for the S.&P. 500 at the end of 2014 is 1,900, or a modest 3 percent gain. But that assumes no expansion in the market's price-to-earnings ratio. In similar periods with low inflation, market multiples have ranged from 18 to 20 times projected earnings, Ms. Cohen said, compared with the market's current valuation of about 15 times earnings. If that multiple expands to 19, the S.&P. 500 would rise to about 2,200, according to the Goldman Sachs model. That would produce a 19 percent rise in the S.&P. 500. Mr. Miller, who runs the Legg Mason Opportunity Trust, returns to this column for the third consecutive year. He was also accurate in his forecast for 2013, and as a mutual fund manager, he put his money behind his forecast: His fund rose a remarkable 67 percent in 2013 on the heels of a 40 percent gain in 2012, helping him regain his legendary reputation for stock picking that was briefly tarnished by the financial crisis. Before 2008, Mr. Miller's fund outperformed the S.&P. 500 for a record 15 consecutive years. Correction: January 3, 2014 An earlier version of this article misstated the name of the Legg Mason investment fund run by Bill Miller. It is Legg Mason Opportunity Trust, not Legg Mason Capital Management Opportunity Trust.