Market-watchers cast an eye over NZ's prospects for next year, and discover reasons to be optimistic and a bit cautious.
Market-watchers say New Zealand's share market will be underpinned by a strong economy next year, but higher interest rates and the general election pose challenges.
New Zealand's benchmark index the NZX50 has risen by about 17 per cent this year, following a stellar 25 per cent gain last year.
Mark Lister, head of research at Craigs Investments Partners - New Zealand's largest retail broker - believes the sharemarket won't perform as strongly next year.
"We still have a positive view on the New Zealand sharemarket over the coming year," he said. "The New Zealand economy is gaining momentum and is in arguably the best shape when we look across the developed world.
"Our corporate sector is in good shape with low debt levels, earnings growth of close to 10 per cent is expected and the average dividend yield is almost 6 per cent. These factors should all keep our market well-supported.
"However ... I think we are almost certainly in for a more modest performance over 2014."
Lister says growth of 8 to 10 per cent would be a good outcome for New Zealand's sharemarket but it's likely that overseas markets will do better than ours.
Forsyth Barr's head of private wealth, Rob Mercer, says the strong share price increases of the past few years mean the focus will now go on companies to live up to that growth.
"New Zealand has a positive economic backdrop for the year ahead but the market's elevated valuation multiples mean more emphasis needs to be placed on the ability of companies to deliver earnings growth."
But investors needed to take into account issues such as the general election, higher interest rates and sluggish economic conditions in Australia.
"Politics and business unfortunately interact and in 2014 New Zealand has a general election. The current polls indicate that the outcome is a coin toss."
Mercer said political rhetoric had already raised perceptions of political and regulatory risks for some companies and sectors.
"SkyCity's convention centre, building product prices, subsidised film studios, deep water oil drilling and more lately Chorus are being portrayed as corporate favouritism and the overruling of independent regulators or public wishes."
Mercer said he expected most issues to be dealt with before the election but the future of the electricity sector and asset sales would depend on its outcome.
Lister predicted rising interest rates would be a key issue for 2014.
"While this is a reflection of a strengthening economy, it will slow house price gains and increase borrowing costs for businesses and consumers.
"It could also mean that growth stocks do better than income stocks."
Lister said the New Zealand dollar could also fall next year as the United States wound back its money printing programme.
"This would be good for the export sector, as well as good for companies with overseas exposures and for people who own overseas shares."
He said that belief combined with the political risks were behind his company's decision to target international shares and local companies with overseas earnings.
JBWere strategist Bernard Doyle is convinced New Zealand may not be the best place for investors.
This month, Doyle recommended clients lower their exposure to New Zealand because of concerns about high local share prices, rising interest rates and the pending general election.
"This backdrop leaves us underwhelmed with the risk-reward presented by the local market," he said.
"This does not mean we think New Zealand equities are necessarily going to decline in 2014.
"It simply reflects that we don't believe investors are likely to be adequately rewarded for the risks they bear in this market."
Instead, Doyle is recommending clients invest more in global listed companies, and he even prefers Australia to New Zealand.
"Global equities are top of the pile, Australia second, and New Zealand last."