Near-unanimous buying has spurred concern investors are too complacent. The Chicago Board Options Exchange Volatility Index, derived from the price of contracts used to protect against share declines, retreated 31 percent this year for its biggest decrease since 2009. The gauge averaged about 14.3, the lowest reading since 2006, data compiled by Bloomberg show. It closed below its historic mean of 20.20 on all but two days of the year, ending last week at 12.46.

“The equity market has been the one asset that stood out this year, the one asset that we haven’t seen volatility and we just see persistent increases without much of a decline,” Arvin Soh, a New York-based portfolio manager with GAM, said by phone on Dec. 18. His firm manages more than $120 billion.

U.S. bonds fell 3.4 percent this year, poised for the first drop since 2009. For all the losses, demand for U.S. government debt remains stronger than at any time before the financial crisis as foreign central banks, insurers and pensions are willing to finance the largest debtor nation.

Investors bid for $5.75 trillion of notes in government auctions in 2013, or 2.87 times the amount sold, data compiled by Bloomberg show. The ratio is the fourth-highest since the Treasury Department began releasing the data in 1993, surpassed only in the past three years as demand peaked at 3.15 times in 2012. Before the Federal Reserve began its stimulus in 2008, the bid-to-cover ratio never exceeded 2.65 times in a year.

Stock Swings

Stock swings will widen in 2014 as the Fed continues to cut its bond-buying program, according to Soh. The central bank will probably reduce its purchases by $10 billion in each of its next seven meetings before ending the program in December 2014, according to the median forecast in a Bloomberg survey of 41 economists conducted on Dec. 19.

“That makes things more challenging,” he said. “It means absolute returns that one would expect from the equity market will be lower than this year.”

Earnings growth is slowing. Profits rose about 3.8 percent per quarter this year on average, compared with 20 percent the three years before that. The slowdown pushed price-earnings ratios up about 20 percent to 17.4, an almost four-year high.

Multiple Expansion

“2013 was a multiple expansion story,” Rob Eschweiler, a Houston-based investment specialist at JPMorgan Chase Private Bank NA, which manages about $935 billion, said in a Dec. 19 phone interview. “Equities are approaching fair value range. They’re not historically expensive, but not historically cheap.”