The Trump Rally Extends as DJIA Taps at 20,000
$DIA, $SPY, $QQQ, $VXX
Jeremy Siegel says stocks are the best long-term investment and the market’s 6% rise since Republican Donald Trump was elected US President is just the beginning of a strong rally.
“I think the Trump rally has a way to run,” Professor Siegel said Monday.
The DJIA is up 13% YTD, putting in on course to be the best year since Y 2014. Financial stocks have led the gainers as investors expect President-elect Donald Trump to repeal or rein in many of the post-crisis financial regulations enacted under lame duck President Barack Hussein Obama.
Professor Siegel explained his Bullish ideas about stocks 22 years ago in a book “Stocks for the Long Run,” which showed that over 200 years, stocks have gained 6.7% a year after adjusted for inflation. That’s better than the 3.6% for US government bonds and 0.6% for Gold.
“There are a lot of bumps along the way,” he said but “stocks are the best long-run asset, clearly performing far better than any major asset class this year.”
He does not see stocks in a bubble, despite Donald Trump’s claims during the campaign that the Fed’s loose monetary policy had made the market too overvalued.
The trailing 12-month PE/R (price-to-earnings ratio) for the S&P 500 has risen to 24X from 23X a year earlier. That’s less than the 30X ratio during the dot-com bubble in Y 1999.
Professor Siegel recommends that investors stick to passive investing strategies that steadily buy stocks during highs and lows aka dollar cost averaging.
“I like index funds a lot,” he said, recommending investors also have a global stock fund. “With two or three funds, you can really cover the world quite well.”
Monday, the US major stock market indexes finished at: DJIA +39.58 at 19796.43, NAS Comp -31.96 at 5412.54, S&P 500 -2.57 at 2256.96
Volume: Trade was heavy, 1.17-B/shares exchanged on the NYSE
- Russell 2000 +21.5% YTD
- DJIA +13.6% YTD
- S&P 500 +10.4% YTD
- NAS Comp +8.1% YTD
|HeffX-LTN Analysis for DIA:||Overall||Short||Intermediate||Long|
|Bullish (0.45)||Bullish (0.40)||Very Bullish (0.56)||Bullish (0.39)|
|HeffX-LTN Analysis for SPY:||Overall||Short||Intermediate||Long|
|Bullish (0.39)||Bullish (0.33)||Bullish (0.48)||Bullish (0.36)|
|HeffX-LTN Analysis for QQQ:||Overall||Short||Intermediate||Long|
|Bullish (0.36)||Bullish (0.31)||Bullish (0.38)||Bullish (0.39)|
|HeffX-LTN Analysis for VXX:||Overall||Short||Intermediate||Long|
|Very Bearish (-0.56)||Very Bearish (-0.65)||Bearish (-0.33)||Very Bearish (-0.71)|