Fear that proposed tax hikes could put our recovery in jeopardy, or that the employment picture was being falsely represented may have kept you out of the market this year. The S&P 500 is up 26% and the Dow Jones Industrial Average 23% through Friday's close. The real fear in 2013, which many portfolio managers and hedge funds are now facing, was being underinvested.

Two years ago there was serious concern the U.S. was becoming Greece, which was in the process of becoming bankrupt. Obama's first term was nearing its end and each party's fight for the presidency seemed to trump millions of Americans' fight for a job. In August 2011, amid our government's inability to govern and a fiery debt ceiling debate, Standard & Poor's downgraded the United States' credit rating from AAA for the first time in history, to AA+.

We all know how this story played out: Yields on our debt actually declined as the downgrade-inspired fear caused a flight to safety. But two years ago there was a legitimate and palpable concern we would not get our act together.

The fear going into 2012 was our ever-expanding budget deficit and our economy's prospective inability to get people working (and spending). The S&P 500 was up 14.51% and the Dow 8% for the year; long-dated Treasury Bonds were up over 33% thanks to the aforementioned fears. The unemployment rate at the end of 2011 was still 8.5%, though very few believed it was headed lower at the time.

Three years ago the concern was the European Union was doomed -- at least one of its members was certainly headed for insolvency and Germany wasn't going to take it anymore. Despite the fact that our stock market had bounced nearly 100% from the March 2009 bottom, the DJIA was at 11,600, well below its October 2007 high north of 14,000.

Our recovery was shaky at best at that point, and both residential and commercial real estate prices were still falling. If you had excellent credit and were looking to buy a new home at the end of 2010, your bank was at least polite in telling you "No." Things were really not looking good. While headlines warned that another recession was possible, it was clear to just about everyone that we were still in one.

The fear going into 2011 was that our stock market was merely experiencing a dead-cat bounce, and that we were headed straight back down for something far worse than 2008-2009. The S&P 500 finished the year down 1%, the DJIA up 5% and nationwide unemployment was at 9.3%.

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