A lot of economic stimulus has gone a long way in the stock market this year.

And with the Federal Reserve saying it wants to keep rates low until it sees more improvement in the economy, investors could enjoy their joy ride throughout much of 2014.

The easy money, along with astute stock picking, helped propel local experts in the Honolulu Star-Advertiser’s 12th annual investment contest to robust gains in the third quarter that easily outdistanced the three major indexes.

Norm Caris, a Kauai resident and managing director of Los Angeles-based investment bank B. Riley & Co., leapfrogged into the contest lead with a nine-month return of 77 percent that lifted his hypothetical $20,000 portfolio to $35,393.82. His performance was largely bolstered on a 135.5 percent increase from Australian surf-wear manufacturer Billabong.

Caris overtook Dwight Melton, co-founder of the Hawaii Stocks and Options Group and a four-time contest champion, who hit the three-quarter turn up 66 percent with $33,195.15.

Barry Hyman, vice president, private client group, for the Maui branch of FIM Group Ltd., was third with a 31.7 percent increase to $26,338.73.

And Richard Dole, chief executive of Honolulu-based investment bank Dole Capital LLC, was up 25.2 percent to $25,033.86.

The July-to-September returns of all four experts were equally impressive, with Caris up 42 percent, Dole ahead 21 percent, Melton up 16.2 percent and Hyman ahead 15.1 percent.

Those returns easily beat the returns of the three major indexes during the quarter. The Nasdaq composite index was up 11.2 percent, the Standard & Poor’s 500 index was up 5.2 percent and the Dow Jones industrial average was up 2.1 percent. Through nine months the Nasdaq was up 26.1 percent, the S&P 500 was up 19.8 percent and the Dow was up 17.6 percent.

The Fed said last month it was maintaining its $85 billion monthly bond purchasing program that is designed to lower long-term borrowing costs and encourage investment and hiring.

But some local stock experts say it’s time that the Fed start scaling back those purchases.

"The Fed’s decision (to refrain from slowing down bond purchases) served to further undermine confidence in both the Fed and the federal government," said Caris. "We currently are cautious on the market, and I think it would be possible to see a 5 percent to 10 percent correction before the end of this year."

Even so, the first nine months should more than make up for any potential pullback.

Hyman said that at some point soon the Fed, which has been pumping money into the economy to stimulate growth, needs to take its foot off the pedal and let the economy follow its natural course.

"It is not healthy for the economy to be dependent on unsustainable stimulus," Hyman said. "The Fed must come to grips with the fact that there may never be an ‘all clear’ signal and that it is time to begin taking away the pacifier from the baby. The baby will do fine. This seems as good a time as any to begin a gradual removal of the excessive stimulus."

On the other hand, Melton and Dole said investors are appreciative of the Fed’s easy-money policy.

"Most (investors) appear to be notably pleased with the steadiness of the business expansion and with the reluctance of the Fed to quickly shift monetary gears," Melton said.

Dole added that the Fed was correct in not scaling back its bond purchases because at the end of the second quarter, a partial government shutdown and a debate on lifting the debt ceiling were looming. But he believes the market’s best days in 2013 are behind it.

"With the market exhibiting double-digit gains through the first three quarters, it’s hard to expect the market to move more than sideways over the final quarter of the year," Dole said. "There is likely to be a shifting of industry sectors. Inventories are lean, corporate balance sheets are relatively liquid, the Federal Reserve continues to be accommodative, the global central banks appear to be easing and the job market is improving."

Caris scored a bonanza last quarter with Billabong, one of two picks by the experts to more than double during the three-month period. Billabong, a debt-laden company in the early stages of a turnaround, saw its shares jump 135.5 percent during the quarter after reaching a refinancing deal with private equity firm Altamont Capital Partners. But the stock leveled out after it backed out of the deal with Altamont and signed a cheaper recapitalization deal with previously spurned suitors Centerbridge Partners and Oaktree Capital Management.

Dole also scored a double with Facebook, the once-beleaguered stock that has gained new life after a dismal initial public offering. Facebook soared 101.9 percent to $50.23 after revenue jumped 53 percent in the second quarter amid strong mobile advertising growth.