2013 was a good year for equity investors with markets responding to more upbeat assessments over the strength of the UK economy.

This was reflected in the 16.7% rise in the All Share Index and 28.7% for the Mid 250. Traditional safe havens such as the higher yielding utilities, oils and miners lagged behind the wider index while cyclical stocks, being more exposed to the domestic economy, outperformed. It was a good year for smaller companies which rebounded from depressed levels with many smaller company funds such as the Aberforth gaining over 50% during the year.

Forecasts for 2014 vary but generally equities are expected to make further progress. However, last year was not a good one for bond investors. They saw the value of their gilt edged holdings fall as yields rose to their highest level since July 2011 on signs of a strengthening UK economy and news that the US Federal Reserve is to reduce its bond buying quantitative easing programme.

However, it now appears that the US central bank is in no hurry to end its asset purchases and this has been behind the surge in share prices during the past fortnight.

It is at this time that retailers are judged by the success or otherwise of their Christmas trading. Shoppers’ refusal to spend until the last minute has prompted panicked price cuts across the high street. Despite pre-Christmas price cuts, Marks & Spencer is likely to admit to dismal trading in the run up to the holiday period, when it announces its results on Thursday. Debenhams has already issued a severe profits warning and the departure of its finance director. However, Next, House of Fraser and John Lewis have scored well with shoppers.

: : Mark Marshall is an investment manager with Charles Stanley & Co in Ipswich.