Dow to Tick Up 6% More in ’13: Siegel

Equities are poised for a good couple of months — or more, the financial expert says

Jeremy Siegel, Wharton finance professor. (Photo: AP) Jeremy Siegel, Wharton finance professor. (Photo: AP)

Finance guru Jeremy Siegel says the Dow could increase another 6% this year and at least 10% next year. The index has already moved up 25% so far this year, and he sees it between 16,000 and 17,000 by year end.

The Wharton professor, speaking on CNBC on Monday, reminded investors that the final two months of the year “are usually pretty good months.” Plus, no major uncertainties hang over the markets, “at least in these two months coming up," he says.

“I think the economy is going to hold on here,” Siegel said. In 2014, he sees GDP improving to 3% or as high as 3.5%.

The Dow Jones industrial average was up about 22 points, and trading above 15,590 mid-Monday.

Siegel sees tailwinds for the Dow as fourth-quarter results are released. In addition, dividends have improved 10%-15% this year and are “rising strong.”

“This is a very favorable climate still for equities,” Siegel stressed.

Meanwhile, the Standard & Poor's 500 index was up more than 23% in 2013 through Friday.

Paul Krake of View from the Peak: Macro Strategies told CNBC on Sunday that the S&P could improve 15% over the next two months or so.

"Given the outlook for historically low funding rates, the S&P 500 looks some 15% undervalued, 20% from October lows," Krake said. He’s widened equity holdings in his absolute return portfolio from 50% to 80% based on this bullish outlook.

Low interest rates mean funding costs for companies are extremely low and helps produce robust returns, he says.

"The naysayers will come in and say global growth is stagnant, economic growth is anemic," Krake said. "The reality is that this is the first year since 1995 that we've had simultaneous growth in China, Europe, the U.S. and Japan. Yes, it's slow, but valuations aren't stretched."

He did add that the S&P was likely to experience a 10% to 15% correction once the Fed made a serious tapering announcement.

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