The Standard & Poor’s 500 Index will advance about 20 percent in 2014 after a sharp correction, according to Blackstone Group LP’s Byron Wien, who got the direction of equity and gold prices wrong in 2013.

The U.S. economy will grow more than 3 percent, sending the dollar to less than $1.25 against the euro, Wien, vice chairman of Blackstone’s advisory services unit, said in his annual “10 Surprises” list published since 1986. Stocks will drop 10 percent before rallying to a record during the year, while the price of oil will exceed $110 per barrel in 2014.

“We experience a Dickensian market with the best of times and the worst of times,” Wien wrote in a statement today. “Fed tapering proves to be a non-event.”

In 2013, Wien missed a 30 percent rally in the S&P 500, the best since 1997, as he forecast the benchmark U.S. stock gauge would fall below 1,300. It closed at a record 1,848.36 last year. His call for gold at $1,900 an ounce was countered by a 28 percent drop, the worst in more than three decades, to $1,202.30.

(For a full list of his surprises, click here. To see the 2014 top 10 predictions of Nuveen's Bob Doll, click here.)

Demand for gold as a preserver of wealth collapsed as central bank stimulus, led by the Federal Reserve, failed to ignite runaway inflation. Investors continued to pour money into equities even as the Fed announced plans to reduce the pace of bond buying, amid a faster-than-estimated expansion of U.S. economic output.

Treasury Yields

The strong U.S. economy and higher inflation will push the yield on the 10-year U.S. Treasury to 4 percent in 2014, Wien said today. Japan’s Nikkei 225 Stock Average rises to 18,000 in early 2014 before a 20 percent correction in the second half as an aging population and a declining work force take their toll on the market. In China, growth slows to 6 percent and equities traded on the mainland disappoint.

“China’s Third Plenum policies to rebalance the economy toward the consumer and away from a dependence on investment spending slow the growth rate,” Wien said. “Emerging market investing continues to prove treacherous.”

Pro-growth policies in Mexico and South Korea will result in “significant appreciation” in their equity markets, while other emerging markets underperform.

The 80-year-old former Morgan Stanley senior strategist was right in his call for a 2013 surge in the Nikkei to above 12,000 as well as for a decline in the yen to 100 per dollar.

Japan Stimulus

The Japanese currency lost 18 percent of its value against the U.S. dollar to close the year at 105.31, while the Nikkei climbed 57 percent to 16,291.31 as confidence increased that Bank of Japan Governor Haruhiko Kuroda’s stimulus plan would end 15 years of deflation and that a weakening yen would boost profits for exporters.

Wien also said in January 2013 that U.S. bank stocks would reverse their 2012 gains, while European stocks would decline as the region would remain in recession. The S&P 500 Financials Sector Index rose 33 percent in 2013, the most since 1997, while the Stoxx Europe 600 Index increased 17 percent for its biggest increase since 2009 as the euro area exited a two-year long economic contraction.

In 2009, Wien, who was chief investment strategist for Pequot Capital Management Inc., predicted rallies in equities, gold and oil. From 2005 to 2009, he worked at Pequot, which closed in 2009 amid an insider trading probe by the U.S. Securities and Exchange Commission.

Wien was incorrect last year in predicting oil would slip to $70 a barrel. The U.S. crude benchmark, West Texas Intermediate, averaged $98.11 a barrel in 2013 and closed at 98.45. He also got forecasts on Chinese stocks as well as the prices of corn, wheat and cattle wrong. Since 1996, his calls for benchmark gauges for American stocks have been right five times, according to data compiled by Bloomberg.