For months, Carol Schleif has thought the stock market was misguided in worrying about the prospect that the Federal Reserve would scale back, or taper, its economic stimulus.

And when the Fed announced on Dec. 18 that it would begin to reduce the bond purchasing at the heart of the stimulus effort, Schleif was proven right. Stocks bounced upward and continued climbing through the holidays.

Schleif, regional chief investment officer for Abbot Downing and a participant in the annual Star Tribune Investors Roundtable, said the stock declines seen earlier in the year on rumors or suggestions of tapering likely reflected a concern about something else: higher interest rates.

“By cutting back on bond purchases, the Fed is basically saying `We’d like to stop using the credit card so much to get our balance sheet in better shape,’” she said. “The decision to raise short term rates, on the other hand, would be predicated on a very strong economy at risk of overheating with inflation picking up markedly. We aren't anywhere near that point, as the Fed made clear with their [Dec. 18] announcement.”

Schleif said she has long doubted that the Fed would work so hard to revive the economy and throw that work away by “heavy handing the system” with a quick lifting of interest rates.

She predicted that the S&P 500 will end 2014 at 1,913, up from Friday’s close of 1,841, though likely after some see-sawing around. “I do think we’ll have a volatile year but when all is said and done, equities are still going to be the place to be, whether they are domestic or emerging,” Schleif said.

For everyday investors, she recommends a steady, even-handed approach to the market known as dollar-cost averaging. Under that strategy, investors decide how much they want to have put in by year’s end, then divide it by 12 and put one-twelfth in every month.

Under that strategy, investors don’t worry about the daily or weekly up-and-down movements of stock prices.