Page 20 - Investment Advisor - October 2021

PORTFOLIO PERSPECTIVES

By Jeff Berman and Michael S. Fischer

Jeremy Siegel’s Top 10 Economic Predictions

for the Next Few Months and Beyond

Also, falling fees saved investors $6.2 billion in 2020, according

to Morningstar.

look into the crystal ball sug-
gests we will see a strong
A economy, continued rising
inflation and higher taxes over the next
several months, according to Jeremy
Siegel, senior investment strategy advi-
sor at WisdomTree and professor of
finance at the Wharton School of the
University of Pennsylvania.
In a keynote address during the
Orion Ascent conference in late August,
Siegel shared his thoughts on the state
of the markets and the economy. He
also showed how today’s market and
economic environment fits into a lon-
ger-view historic context, provided
observations on global equity valuation,
and discussed the impact of the COVID-
19 pandemic on stock and bond returns
and future inflation.
Here are Siegel’s top 10 predictions he issues in 2022,” he predicted. 4. TAPERING WILL START SOON.
made for the economy: The current market “hesitation” The Fed will start tapering off its
created by the COVID-19 delta vari- stimulus, and short rates will rise in
1. THE ECONOMY WILL BE STRONG ant, meanwhile, will fade and spur the early 2022.
DESPITE RISING INFLATION. economy, he predicted.
The enormous stimulus provided by the 5. BOND YIELDS WILL STILL RISE
Federal Reserve and government poli- 2. PRICES MAY RISE 20% OVER THE TOWARD 2% BY YEAR-END.
cies under Presidents Donald Trump NEXT FEW YEARS. Siegel predicted that bond yields will
and Joe Biden will result in a strong As the average prices of goods and ser- still increase toward 2% by the end of
economy but higher inflation, Siegel vices continue to rise, we may see the 2021. The 40-year bull market in bonds
told attendees. price level increase 20% or more over ended in 2020 amid the pandemic.
Although the prices of everything the next three to four years, with an Treasurys are now supported by huge
from housing to restaurant meals have increase of about 5%-6% each year. hedge fund demand.
risen, many consumers continue to spend
because they have the money, he said. 3. STOCKS WILL CONTINUE TO BE A 6. VALUE STOCKS LIKELY WILL
After all, “the government put $5 trillion GREAT BET FOR INVESTORS. OUTPERFORM GROWTH FOR THE LILA PHOTO for TD Ameritrade Institutional
into the hands of people that they didn’t The “moderate” inflationary environ- REST OF 2021.
have before,” he noted. But “nothing is ment is providing a “field day for stocks,” For the remainder of this year, value
free,” Siegel stressed. The inflation we he told attendees. Investors should stocks will probably outperform growth
are seeing is “not temporary” and will remember: Stocks are “real assets,” and amid the reopening of the economy, ris-
be “probably one of the major political the more leverage, the better. ing yields and the search for yield.

18 INVESTMENT ADVISOR OCTOBER 2021 | ThinkAdvisor.com