Home Business Noted Economist Jeremy Siegel Says the Stock Market Could Be Headed to New Heights. Here’s Why.

Noted Economist Jeremy Siegel Says the Stock Market Could Be Headed to New Heights. Here’s Why.

by Clarence Jones

The stock market has rebounded strongly this year after experiencing the worst downturn since 2008. With major stock market indexes gaining over 20% from their recent lows, some experts believe that the next bull market has started. However, the final test will be whether the market can reach new all-time highs.

There are positive signs in the economy that support the view of a strong market performance. Retail sales have been better than expected, showing the resilience of consumer spending. The Purchasing Managers Index (PMI), which measures business spending, remains strong. Weekly jobless claims have also remained subdued, indicating no increase in layoffs. Additionally, there has been a significant shift in confidence among business executives.

Jeremy Siegel, a well-respected economist and author, believes that the stock market’s strong performance will continue. He points to these economic indicators as providing “positive momentum” for the market. Siegel also notes that historically, corporate profits have been the biggest contributor to stock market gains over the long term. Recent results show that the rally could continue, with a majority of companies reporting results above analyst expectations.

However, there are challenges that could potentially affect the market’s upward trajectory. Oil prices remain high, the United Auto Workers are on strike, and there is the potential for a U.S. government shutdown. Despite these potential stumbling blocks, Siegel believes that the market will continue its overall upward trend.

For investors, the clear takeaway is that the current market rally is likely to continue. However, it’s important for long-term investors to focus on their investment strategy rather than being swayed by day-to-day market fluctuations. Over the past 50 years, the stock market has returned an average of 10% annually, though returns can vary significantly from year to year.

Investors looking to generate returns similar to the overall market can consider investing in exchange-traded funds (ETFs) that track the S&P 500. Examples include the Vanguard S&P 500 ETF (VOO) and the SPDR S&P 500 ETF Trust (SPY).

In conclusion, the stock market’s strong performance this year is signaling the potential for a new bull market. Supported by positive economic indicators and corporate profits, experts believe the market will continue its upward trajectory. Long-term investors should focus on their investment strategy and consider ETFs that track the S&P 500 for exposure to the overall market.

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