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"Immediate Purchase Advised" - explain the optimistic standpoint of the renowned professor

Investment Advisor Jeremy Siegel advocates for buying stocks immediately, citing his optimistic outlook.

"Immediate Purchase Advised" - explain the optimistic standpoint of the renowned professor

Jeremy Siegel's Optimistic Stance on Stocks Amid Turmoil

By Corina Stewart

The stock market is a rollercoaster in 2022, with its familiar tracks far from peak points. Some investors are teetering on the brink of surrender. But fear not, as a distinguished economist offers an alternative perspective - one that encourages buying stocks right now.

"If you're a long-term investor, my advice would be to buy now," stated Jeremy Siegel, a professor at the Wharton School of Business, during an interview with CNBC. But what's his justification?

Stocks are currently stumbling in 2022, due in part to escalating inflation, which saw consumer prices rocketing at their highest rate in 4 decades. To counteract this, the Federal Reserve has been progressively increasing interest rates. Last month, the Fed raised its leading interest rate for the third time in a row, with further increases expected. Ordinarily, this is harmful for stocks, given higher interest rates often make bonds a more appealing investment option.

Nevertheless, Siegel underscores the importance of a long-term perspective, mentioning that many stocks are particularly affordable at present. Just because a stock seems undervalued today doesn't mean it won't dip further or soar exceptionally high in the future. In fact, there are numerous bargains available, often overlooked due to punitive market reactions, that represent solid, fundamentally strong firms, and, on account of their low prices, are a steal for prospective buyers.

"Sure, it could dip even lower in the short term. After all, in bear markets, the descent can get quite steep," Siegel admitted, adding, "The unpredictable nature of the short term is always a factor."

The renowned economist's sanguine outlook on stocks may stem from:

  1. Historical Performance of Stocks: Siegel is known for emphasizing the long-term growth and resilience of the stock market. Historically, stocks have outperformed other asset classes in the long run, despite short-term wobbles.
  2. Recovery Patterns: After severe downturns, stocks tend to enter a bull market phase. Siegel might believe in the market's ability to recover from challenging times such as those we're facing in 2022.
  3. Economic Fundamentals: Although inflation was a significant concern in 2022, economic fundamentals like corporate earnings and consumer demand have remained strong in periods following periods of high inflation. Siegel likely analyzes these factors to gauge the stock market's long-term potential.
  4. Monetary Policy Adjustments: Siegel advocates the potential benefits of rate cuts by the Federal Reserve to boost economic growth. His optimism may be linked to the belief that suitable monetary policy adjustments can help steady markets and spur growth.

To put it plainly, while the specific reasons for Siegel's 2022 long-term optimism are not explicitly detailed, his general outlook on the stock market's historical performance, recovery patterns, economic fundamentals, and potential monetary policy adjustments would likelify contribute to his rosy view.

  1. Despite the erratic performance of stocks in 2022, Jeremy Siegel, a professor at the Wharton School of Business, has advised investors to invest now, citing historical performance of stocks and their long-term growth potential.
  2. In the context of the current economic turmoil, Siegel believes that many stocks are affordable, containing numerous bargains that represent solid, fundamentally strong firms, and are a good investment opportunity for prospective buyers.
  3. The renowned economist's optimistic stance on stocks may be rooted in recovery patterns, whereafter severe downturns the market tends to enter a bull market phase, reflecting the market's ability to recover from challenging economic situations.
  4. Another factor that contributes to Siegel's optimism could be monetary policy adjustments, as he has advocated the potential benefits of rate cuts by the Federal Reserve to boost economic growth and steady markets.
Stocks: Wharton Professor Jeremy Siegel Urgently Advocates Long-Term Investment, Citing His Current Optimism

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