Bill Miller, chairman and chief investment officer of Legg Mason is watching airlines and home builders. (Tim Boyle/Bloomberg)

Following the Standard & Poor’s 500-stock index’s record high in November, will stocks continue their ascent amid what is likely to be lackluster global expansion in 2014? In September, the Federal Reserve’s unexpected delay in tapering its stimulus program whipsawed debt markets. Last week it announced it would begin tapering. Where should bond investors go for returns?

We asked eight of the world’s leading money managers where they are placing their bets in the United States, Europe and emerging markets for 2014. These mutual-fund investors have beaten at least 90 percent of their peers over three or five years. They see more chances to make money in the United States and Europe, if you avoid the land mines, than in languishing emerging markets.

U.S. health-care stocks, which outperformed the S&P 500’s 26 percent gain in 2013, may stumble as the Affordable Care Act reduces payments to hospitals, says John Burbank, founder of Passport Capital. You should also be picky with biotech, which has gotten frothy after several years of gains, says Rajiv Kaul, a fund manager at Fidelity Investments.

Across the Atlantic, as the euro zone finally shakes off a recession, opportunities abound in Spanish banking and media industries after the post-crisis consolidation, says Dean Tenerelli, a fund manager at T. Rowe Price. You will have to hunt through the wreckage in emerging markets, after local-currency debt plunged in 2013, to find sovereign-debt deals: Look for countries with strong balance sheets, such as Mexico. Our distinguished panel below also explains why gold may be poised for a comeback and why small companies might see big gains in Asia.

Bill Miller
Fund manager, Baltimore

Runs: $1.8 billion Legg Mason Opportunity Trust

Returned: 74 percent in the year ended Dec. 3

Home builders to rise: Many home builders doubled or tripled in 2012. Typically, after a year like that, home builders will go to sleep or down as valuations catch up and then outperform. I expect PulteGroup to beat the market in 2014.

Fly with United: Airlines did well in 2013. The industry historically has been a disaster. We like United a little better than Delta because it has lower pension expenses. And United’s valuation is lower because its integration of Continental is about a year behind Delta, which bought Northwest in 2008.

Dean Tenerelli
Fund manager, T. Rowe Price, London

Runs: $1.3 billion T. Rowe Price European Stock Fund

Returned: 14 percent annual average in three years ended Dec. 3

No-brainer in Spain: There’s still a lot of value in European markets because earnings haven’t begun to recover yet. Spain is a no-brainer because it’s doing the right thing on a macro level. It had over 60 banks going into the crisis, and it will be down to a dozen. Spain will have a much better banking sector now. Bankia SA was one of the problem banks, but the bad properties were taken out.

Power to sell: Energy faces a challenge. There’s a big shift in demand since the United States isn’t going to be importing much oil anymore. And shale is changing the supply equation as well. Oil-servicing companies are going to continue to struggle on pricing, margins and volume.

Dan Ivascyn
Fund manager, Pacific Investment Management Co., Newport Beach, Calif.

Runs: $29 billion Pimco Income Fund

Returned: 11 percent annual average in three years ended Dec. 3

Mexico stands out: Emerging markets will probably fare better in 2014 than this year, but they’re still susceptible to negative shocks from global macroeconomic factors. Countries with strong balance sheets and ample policy flexibility, such as Mexico, should outperform.

Demystify MBS: We expect mortgage-backed securities that are not guaranteed by the government to be a solid performer in 2014. Many of them are still trading at a significant discount because of how complex they are. While many investors don’t have the resources to adequately analyze the space, those who do can capitalize on the chance to profit. The U.S. non-guaranteed MBS market is the largest, has the most-complicated collateral and structures and also provides the greatest opportunities.

Rajiv Kaul
Fund manager, Fidelity Investments, Boston

Runs: $7.4 billion Fidelity Select Biotechnology Portfolio

Returned: 40 percent annual average in three years ended Dec. 3

Beware a biotech bubble: After five years of great returns, it’s important not to lose touch with reality. Biotech has a historical tendency of bubbles and busts, so thinking about risk is really important now. I’m not saying we’re in a bubble; we really could go either way. There’s been a frenzy for issuing stock, and the market doesn’t discount between quality and quantity when that happens. On the flip side, we’re in this golden age of science with diagnosing genetic makeups. So you really have to pick the right stocks now. You can’t just buy the biotech sector. There’s going to be more differentiation, more winners and losers.

Seek targeted drugs: Today, everyone can get a diagnostic of their genetic makeup for a few thousand dollars instead of $5 million only about a decade ago. More drugs will be produced to cater to diseases unearthed by diagnostics. There is a drug, Kalydeco, produced by Vertex, for people with a specific kind of mutation that causes cystic fibrosis. Companies that produce drugs for defined patient populations have an advantage over makers of drugs for the general population like Lipitor, which treats high cholesterol. For patients who need targeted drugs, there’s usually no alternative. With a drug for cholesterol or diabetes, the cost of development is very high, since the Food and Drug Administration has very high safety hurdles for therapies given to millions of people who are generally healthy.

Ride the innovators: The companies that are first to market with drugs can produce tremendous cash flow and high margins because there’s such a high barrier to entry for others. Genentech developed a drug in the early 2000s for colon cancer called Avastin. There were about 10 other companies developing similar therapies at the time. They had a hard time being developed after patients were given Avastin, because it was very difficult to show the benefits over Avastin.

Profit from generics: The world of biotech will eventually divide into two different categories. One is low-cost distribution catering to a global market where everyone needs a cheap pill such as a generic Lipitor. It’s a totally different business model because it isn’t research-and-development-centric; it’s more focused on distribution and volume. If you can find the winners in the next five or 10 years among generic companies, you’ll do really well. And the other is a world where companies that are the most innovative will be rewarded the most as Western societies demand better outcomes.

Steve Cao
Fund manager, Invesco, Houston

Runs: $768 million Invesco Asia Pacific Growth Fund

Returned: 7.1 percent annual average in the three years ended Dec. 3

Embrace small in Asia: Some emerging markets in Asia such as Indonesia and India are having a dilemma with deficits and weak currencies. While growth is weakening, they have to respond to currency depreciation by raising interest rates. We see opportunities, especially in the small- and mid-cap areas. We own Lee & Man Paper Manufacturing, which makes packaging materials. It’s the lowest-cost producer in the sector because it runs an integrated operation and has access to cheaper borrowing costs in Hong Kong relative to peers who borrow from inside China. Supply is also improving because capacity expansion has slowed and the government is shutting inefficient players on pollution concerns.

Shun commodities: Commodities are still vulnerable to the growth deceleration in China as it rebalances its economy to domestic consumption from investment. That will reduce consumption for commodities such as iron and copper.

Kathleen Gaffney
Fund manager, Eaton Vance, Boston

Co-managed: $22 billion Loomis Sayles Bond Fund

Returned: 11 percent annual average in three years ended Oct. 1, 2012

Connect with telecom: There isn’t any fixed-income sector that’s a table-pounding buy. You’ll find opportunities in investment-grade credit and high-yield bonds. The strategic actions companies are beginning to take, like consolidation in the telecom area, create good opportunities in investment-grade telecom bonds as the global industry has matured and price competition has reached its limits. Going forward, market share will be the primary driver.

Avoid Treasurys: The least attractive area is where you have the most sensitivity to interest-rate risk, like Treasurys. Prices are still too high for Treasurys, and I don’t think short-term interest rates are going up soon. I would wait for a better opportunity to return to Treasurys when 10-year notes yield more than 5 percent.

Scott Minerd
Global chief investment officer, Guggenheim Partners, Los Angeles

Runs: Core-fixed-income private accounts, mutual funds that include leveraged loans

Returned: 6.4 percent annual average from inception of strategies in January 1999 to Sept. 30

Play the aircraft cycle: We like bonds that are collateralized by aircraft. The airline industry has reduced itself down to an oligopoly, and you’re not going to see the same vicious price cutting we saw in the past.

Bond with Bermuda: I would stay away from sovereign debt because there is little upside. Bermuda looks interesting because its debt trades at attractive yields relative to risk and its total debt to GDP is much lower than European counterparts.

John Burbank
Founder, Passport Capital, San Francisco

Runs: $1.3 billion Global Strategy hedge fund

Returned: 19 percent annual average from inception in August 2000 to Sept. 30

Appreciate tech: Tech and other areas of greatest innovation were underappreciated in 2013 and will gain more respect over time. The only things causing growth are demographics, innovation and major changes in adoption driven by tech and consumer behavior. We like leading Internet firms in the United States, China and Japan: the United States because it’s the center of innovation and the largest market, China because it won’t let Western firms be leaders and Japan because of the peculiarities of the culture and language.

Examine health care: The health-care sector isn’t yet accounting for the part of the Obamacare that kicks in in 2014. It will result in less-generous payments to hospitals under plans sold on exchanges. People think that Obamacare is about the loading of uninsured people into the insured arena. But the far more significant part over the longer term is the limitations in benefits to providers. As a result, many things in health care are overpriced and should be looked at with more scrutiny. The end goal of Obamacare is a massive long-term change of incentives across the health-care payer and provider universes where they no longer simply pass on inflated fees for their services but manage down costs per patient and reap profit with accountable care.

Return to gold: Since QE3, gold has been avoided by Western investors. After several declines, the price could rally 20 to 30 percent in 2014. Chinese buying has increased dramatically at the same time Indian demand has decreased because of a high tax to help the rupee. There’s essentially flat or declining gold production around the world, and gold at some point will again be viewed as a valuable currency.