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According to Wharton professor Jeremy Siegel, the stock market still has room to rise 8% through the end of 2024.
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Siegel said comparing the current stock market to the 1999 dot-com bubble is an overstatement.
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Siegel believes this is a big stock market opportunity for investors to take advantage of this year.
It’s no secret that Wharton professor Jeremy Siegel is bullish on the stock market, and the S&P 500 reaching the psychological 5,000 level isn’t deterring his positive outlook.
Siegel said in an interview with CNBC on Thursday that the S&P 500 index could rise another 8% from its current level by the end of the year, which would put the index at about 5,400.
This forecast is in line with Wall Street’s most bullish stock market outlook.
Siegel’s bullish stance comes as some investment strategists compare the current stock market to the highest valuations seen during the dot-com bubble of 1999 and 2000, but Siegel said Not convinced.
“It’s no worse than 1999,” Siegel said. “There’s one thing that’s very different, and it’s important: In the early 2000s, the S&P was selling at a P/E of 30 times, and the tech sector was trading at a much higher P/E of 60 to 70 times. By the way, interest rates. “Stock prices back then were higher than they are now. We’re selling for 20 times earnings now, so it’s not cheap by any means, but it’s certainly not like it was in 1999 or 2000.” .”
Siegel said investors should focus on buying value and small-cap stocks with P/E ratios of 15x and 12x, respectively, as they may eventually start to outperform large-cap stocks.
“I didn’t say it was big. [cap stocks] It crashes or something like that. But if the bad situation is concentrated at the top, that means there are opportunities on the other side, and I think that’s where you’ll see better returns over the next three to five years. thinking about. ” Siegel said.
And from commercial real estate to the recent New York Community Bancorp bombing, there are continuing risks in the stock market that investors should be concerned about, but they shouldn’t buy stocks. That doesn’t mean it, Siegel says.
“One of the oldest adages on Wall Street: Stocks climb a wall of fear. If you wait until all the worries are gone and the skies are clear, you’ve bought at the top, not the bottom. We’re still in a recession.” “There’s always uncertainty and threat, and the stock market has been in that state since its existence,” Siegel said.
Read the original article on Business Insider
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