After a shaky 2013, markets worldwide are closing the year on a strong note. However, 2014 will be a challenging year, with investors having to deal with two major ‘known unknowns’. First, investors need to anticipate the timing of liquidity tapering by the US Federal Reserve, and also assess the market’s reaction to the taper. Second, it is clear that global and Indian investors believe that a change in the governing party at the Centre will place the country on a favourable economic path, although political analysts suggest that a decisive mandate appears unlikely. Investors must not only guess the results of the Indian general elections, but also anticipate the quality of the policy of the next government at the Centre.