Over the past five years, stock returns have been well above their long term average. But over the last ten years, they remain below the average. So what does Wharton professor and Stocks For The Long Run author Jeremy Siegel think is in store going forward? More gains, though the seas could be choppy.
Siegel recently told Barron’s that “the odds-on bet” is that the Dow Jones Industrial Average will hit 18,000 by the end of this year, though a correction could occur first. One reason for Siegel’s optimism is his belief that interest rates “won’t go anywhere near as high as was feared at the end of last year”. Another is that S&P 500 earnings are expected to grow at a strong clip in the second half of the year.
One area Siegel is particularly high on: dividend stocks. He thinks they “could very well be the outperformer in the next two to three years” as it becomes more clear that rates won’t rise as much as some fear.