Investment experts at Atlantic Trust believe the much-anticipated "Great Surge" has not yet materialized, but the U.S. economy is showing signs of momentumATLANTA, Jan. 23, 2014 /PRNewswire/ - Expect a more challenging, mature bull market combined with muted returns in 2014, according to the experts at Atlantic Trust, the U.S. private wealth management division of CIBC (NYSE: CM). Atlantic Trust's Chief Investment Officer David L. Donabedian, CFA, predicts volatility in the market is likely to increase as the Federal Reserve eases off on its uber-stimulative monetary policies. The Fed, which had seemingly been operating in crisis mode for the last five years, took its first steps in acknowledging that the crisis is mostly over by announcing in December plans to scale back and eventually phase out its monthly bond purchases. "As the Yellen Fed seeks to navigate an orderly path to more normal monetary policy, it is unlikely to be a seamless transition," he says. "While valuations appear reasonable on balance, stocks are not cheap. While we expect moderate earnings growth, the profits cycle seems mature." U.S. stocks, which saw returns in excess of 30% in 2013, far surpassed both developed and emerging markets. However, given that equities now seem to hover around fair value, along with a likely high-single-digit earnings growth path, Donabedian believes that a return closer to the S&P 500 Index's long-term average of 10% is a reasonable expectation for 2014. Much of that will depend on the future growth of the global economy. From an asset allocation perspective, Donabedian believes stocks should again outperform bonds and cash this year, while hedged strategies are beginning to look timely. Non-U.S. stocks -- particularly from emerging markets -- are also likely to add value in 2014. Despite some challenges brought on by currency devaluation and inflation, Donabedian recommends maintaining a position in emerging markets, as he believes they continue to represent the best long-term play on growth.