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This bull market is not over, says Jeremy Siegel

Daily Ticker

Last April when the Dow Jones Industrial Average was trading around 14,600, Jeremy Siegel told The Daily Ticker that the Dow would end 2013 between 16,000 and 17,000. It closed last year at 16,577.

Related: Stocks could plunge 50% in the next year or two: Blodget

This year the Wharton professor and author of Stocks for the Long Run 5/E: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies, says the Dow will finish 2014 near 18,000 -- give or take. The Dow closed Thursday at 16,402.

"This bull market is not over," Siegel tells The Daily Ticker in the video above. "I don't think we're going to get the 20% to 30% gain we had in 2013, but it will still be a good market this year."

Related: The great stock valuation debate: Blodget vs. Brown

Siegel cites the market's price earnings ratio--his major yardstick--and low interest rates as the reasons for his bullish outlook.

"Low interest rates are the major reason why stocks don't look expensive to me," says Siegel. The 10-year Treasury closed Thursday with a yield of 2.84%.

Related: Forget the Fed, Interest Rates Are Heading Lower, Shilling Says

"The major competitor for stocks is bonds," explains Siegel. Since "investing is a relative game" [and] there's so little to get elsewhere...stocks are more attractive."

But he cautions that before stocks rally to 18,000 or above there could be a correction of 10% or so.

"We have not had a real correction for so long...anything could happen at this point," Siegel says.

And Siegel could conceivably be wrong in his forecast. In February 2008 he forecast an 8%-10% gain in stocks for that year. The Dow lost 34% that year.

"If you structure for a longer term portfolio...stocks will be the big winner," says Siegel. "If you need the money next year, stocks are always going to be risky, but if you're planning for your retirement, they're the asset of choice."

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