Wharton Professor Jeremy Siegel Bullish on Stock Market, Forecasts 8% Upside by 2024
Renowned Wharton professor Jeremy Siegel remains optimistic about the stock market, predicting an 8% increase by the end of 2024. Despite concerns about the market resembling the dot-com bubble of 1999, Siegel believes that the current situation is different and presents ample opportunities for investors.
Siegel’s positive outlook was shared during an interview with CNBC, where he expressed confidence in the S&P 500’s potential to surge another 8% from its current levels. This surge would place the index at approximately 5,400, aligning with the most bullish projections on Wall Street.
While some investment strategists draw parallels between today’s market and the peak valuations of the dot-com era, Siegel disagrees. He highlights a crucial distinction: in 2000, the S&P was selling at 30 times earnings, with the tech sector reaching even higher multiples of 60 to 70 times earnings. Additionally, interest rates were higher than they are today. In contrast, current valuations stand at around 20 times earnings, which, although not cheap, do not mirror the extreme conditions of two decades ago.
Siegel advises investors to focus on value stocks and small-cap stocks, which are priced at 15 times and 12 times earnings, respectively. He suggests that these sectors may outperform large-cap stocks in the coming years. However, he clarifies that he does not anticipate a crash in large-cap stocks; rather, he believes that the better gains will be found in value and small-cap stocks.
Addressing concerns about risks in the stock market, such as commercial real estate and recent bank failures like New York Community Bancorp, Siegel emphasizes that these challenges should not dissuade investors from buying stocks. He cites a well-known adage on Wall Street: “stocks climb the wall of worry.” Waiting for uncertainties to dissipate and for a clear sky may result in buying at the market’s peak rather than its bottom. Siegel asserts that the stock market has always existed in an age of uncertainty and threats, and investors should not let these factors deter them.
Siegel’s bullish stance on the stock market is a testament to his expertise and reputation as a leading financial authority. His insights provide valuable guidance for investors seeking opportunities in today’s market. With his emphasis on value and small-cap stocks, Siegel encourages investors to explore alternative avenues for potential gains. As the year progresses, it will be interesting to see if Siegel’s predictions come to fruition and if investors capitalize on the opportunities he has identified.
