Buy Stocks Now -- and Hold Them - Kiplinger.com.
I am generally optimistic about equity market performance but skeptical of any calls made by "pundits" who present themselves as experts. Case in point, Jeremy Siegel. Siegel is brilliant, well-read and has been "right" in the past but he severely damages his own credability in this article.
"Making predictions about short-term market moves is extremely hazardous, as Siegel well knows. Like me, he failed to predict the collapse in the financial system last September and its impact on the markets. "I didn't see the balance sheets of these banks and investment banks," Siegel says. "I didn't realize they held so many subprime mortgages."
To me, he'sacknowledging that he, in fact, had not done his homework. He made his call without properly analyzing ALL of the relevant data and was dead wrong. Consequently, anyone that listened to him paid a severe penalty.
The lesson learned - don't listen to the pundits when they make these kind of calls. Always remain at least somewhat skeptical and ask Why? For example, Siegel believes the equity markets could do 10 to 12% this year and double digits on average for the next decade. Why? History tells him so, but as we all know "past performance is not indicative of future performance". More important than history is the current economic environment. I won't make a prediction but will suggest that the current economic environment does not appear supportive of double digit returns in the near term. Siegel may be right in the end but following his lead could be painful in the present.
I am generally optimistic about equity market performance but skeptical of any calls made by "pundits" who present themselves as experts. Case in point, Jeremy Siegel. Siegel is brilliant, well-read and has been "right" in the past but he severely damages his own credability in this article.
"Making predictions about short-term market moves is extremely hazardous, as Siegel well knows. Like me, he failed to predict the collapse in the financial system last September and its impact on the markets. "I didn't see the balance sheets of these banks and investment banks," Siegel says. "I didn't realize they held so many subprime mortgages."
To me, he'sacknowledging that he, in fact, had not done his homework. He made his call without properly analyzing ALL of the relevant data and was dead wrong. Consequently, anyone that listened to him paid a severe penalty.
The lesson learned - don't listen to the pundits when they make these kind of calls. Always remain at least somewhat skeptical and ask Why? For example, Siegel believes the equity markets could do 10 to 12% this year and double digits on average for the next decade. Why? History tells him so, but as we all know "past performance is not indicative of future performance". More important than history is the current economic environment. I won't make a prediction but will suggest that the current economic environment does not appear supportive of double digit returns in the near term. Siegel may be right in the end but following his lead could be painful in the present.
