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Now that the fourth quarter is here, it’s worth taking a final look at how the rest of the year is likely to develop. With three months left to go, it still makes sense to review your portfolio to make sure you’re prepared for what’s likely in store for the remainder of the year.

So, what exactly do I foresee for this final quarter of 2014? Certainly, the world is awash in geopolitical uncertainty and this is likely to continue. But good news on the U.S. economic front should help temper worsening geopolitical tensions and slowing growth in Europe.

Of course, a strengthening U.S. economy may have a downside. If the Federal Reserve (Fed) increases interest rates too soon or by too much, markets could be rattled. Another trend to watch: diverging growth. Europe and Japan are still struggling, while the U.S. continues to evidence signs of strength.

At the same time, stocks are on pace to finish the year with returns in the mid to upper single digits, and I still expect rates to rise, if only modestly, for the remainder of the year.

Against this backdrop, my colleagues and I share five portfolio moves to consider in our latest quarterly update to our 2014 outlook piece, The List: What to Know, What to Do — Fall Update .

Stick with stocks, but be choosy. While stocks are no longer cheap, they still look attractive versus the alternatives, namely bond and cash, and the economic and monetary environment overall remains supportive of equities. However, not every country or market segment is the same. So, as I’ve mentioned before, investors should focus on relative value-in other words, do your comparison shopping across markets and sectors. Selectivity is key. For more on where I see value today, check out my latest Investment Directions monthly market outlook piece as well as the fourth-quarter 2014 outlook from the BlackRock Investment Institute.

Look outside U.S. borders. Increasing international exposure makes sense in general, but even more so these days when most stock market bargains are found overseas. U.S. stocks are no longer cheap, and that has stocks outside U.S. borders looking even more reasonable. Specifically, I see opportunities in Japan, which represents one of the few stock market bargains in the world today, and in select emerging markets, particularly in China and other Asian countries .

Choose your bonds wisely. There are still very few bargains out there for people buying bonds, and some areas of the bond market are more vulnerable to rising rates than others. This means it’s especially important to do your homework and choose your bonds wisely.

For instance, shorter maturity Treasuries, those with durations of two- to five-years, are likely to be more vulnerable to rising rates than their counterparts with longer durations. In addition, with most traditional areas of the bond market looking expensive investors should consider a flexible, go-anywhere approach. Finally, investors should give munis another look, if they haven’t already, as I explain below.

Keep munis in mind. While no longer cheap per se after their extraordinary run in 2014, municipal bonds continue to look attractive versus both Treasuries and corporate bonds. For instance, yields for longer-maturity munis rival or exceed those of their taxable counterparts on a before-tax basis, and this only increases the after-tax value.

Go beyond traditional stocks and bonds. Finally, it’s worth considering incorporating non-traditional, or alternative, strategies into your investing arsenal. With such investments, you can potentially enhance diversification and amplify your portfolio’s growth potential.

For more about these moves, and what to expect for the remainder of 2014, be sure to check out the full piece, The List: What to Know, What to Do — Fall Update .

Source: BlackRock research

Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock and iShares Chief Global Investment Strategist. He is a regular contributor to The Blog and you can find more of his posts here .

This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.

©2014 BlackRock, Inc. All rights reserved. iSHARES  and BLACKROCK  are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.

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