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Could the Dow Reach 18K in 2014?

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    Wharton School of Business finance professor Jeremy Siegel on the outlook for the markets.

  • Duration 6:18
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Because we are talking where the Dow where stocks will be going it's easy to get swept up in the momentum of what appears to be a serious rally that doesn't appear to have much in its path at least right now.

As the Dow heads toward its fifth consecutive record close today more and more people are calling for the -- different this stuff 151000.

What about 161000.

Maybe even 171000.

The man Forbes calls -- the best business school guru -- round is here to make -- even.

-- prediction Jeremy Siegel is a finance professor at the Wharton school of business wonderful to see you again professor thank you for coming on the program.

Thank -- is if not fifteen if not sixteen if not seventeen how high could this Dow Jones industrials -- Well.

Obviously over many years you know there's really almost no limit but that's put -- time frame on this attack a year ago January I -- dad.

There was a 70% chance by the end of this year across 151000.

We are very near that I said it was 5050.

That by the end of this year we would reach 171000.

People but I was her crazy back then.

Now it's not looking so crazy I think by the end of this year we will be in the sixteen to 171000.

Range on the Dow.

And 181000.

Looks to -- 2014.

Like.

The best bet.

Goal okay 2014.

At 181000.

Tell -- professor of where you get your crystal polity and it's very hard to imagine certain risks that we cannot mitigate and I I pull out for example Friday.

North Korea said we're gonna from -- the United States into a burning C.

And I and -- syndicate of myself content water really catch fire that are remembered active within Cleveland for three years so we know water can catch fire but I -- at that it's something happen with North Korea.

Would that not destabilize our stock market there's so many other what -- says well.

Court.

Of course.

I -- there are always those risks out there.

Any elicit any millet a military action blow up in the mid -- we are still importers of oil.

If oil goes to 33020300.

Dollars.

You know all bets are off and and that's always the risk -- on equities I mean if you're not willing to put your money at some risk.

Well today you can't get much more than a zero return and I think more people are saying I'm fed up.

With a zero return.

How have -- say these account for years I I wanna -- I want to try to get something positive and that's why I think you are having the great rotation and I don't think -- great rotation.

Has is more than an it's very infancy at this particular point.

Okay let me get you to the S&P 500 then whether we have 1565 and -- ten points away is that a sure thing.

Yeah that could that could come any -- AME empowered it to put money on -- this week it it will happen.

You know it is so hard we know in the short run there's so much speculation but you definitely see -- the market is.

Is gaining adherents money is flowing from the bond funds from the it.

Money finds three trillion dollars earning 011.

Trillion dollars in savings accounts that are earning zero.

We don't have to have that much flow towards the stock market to reach these new high.

That's where the jobs professor and and people -- wondering because what we did have a pretty decent jobs report number for the month of temporary that came out on Friday.

Don't we need some meaningful job creation before we start to see some I guess some more solid foundation under this stock market when you look back.

At previous bull markets there were some very strong fundamentals this time -- it's very much.

-- thank god for Ben Bernanke he's still there putting a -- of liquidity into this thing.

Well that's one reason why I think this bull market has a place to go because where we're certainly can't improve our economy we are still operating well below our potential.

Seven point seven unemployment rate -- mean the Fed thinks it should be five to five and happened where a capacity utilization that is well below previous peaks.

We have unused capacity we can have more demand without over -- this economy.

What also has to remember you know with seven point 7%.

Unemployment it doesn't mean that you know we have almost 93%.

Of the people working.

And god with less fear then any time in the last five years that they're going to lose their job.

They feel more secure with the housing market moving up with housing values moving up.

This is the primary asset of the of the of an American really more than stocks.

Is is the value of their home -- know what the home indices say I I I've always believe acting.

Housing is going to be leading this stronger recovery the second half of 2000 this.

Worries you aside from -- as you -- the 2300 dollars if there were some massive gyrations are exist and so you know problem out there in the -- In you know -- sleep well you know and listen 9/11 came out of nowhere.

-- and you don't terrorist strikes.

Do come out of nowhere and got you got to get something -- we we have to live with I remember when I was.

I teenagers.

The Cuban missile crisis we all look -- happen this guy Faraci -- ICBM bounced from Russia.

I mean there are going to be these risks out there clearly and they could heat up temporarily drive the market down but -- You know that the basic economy has so much room to improve.

And the valuations.

-- -- I believe are still so low given the low interest rate that this bull has legs.

But the potential is what I hear you talking about professor thank you so very much for joining us here exclusively on Fox Business we appreciate it.

Thanks for having OK you guys -- 181000 by 2014.

And within the week possibly we hit that all time record for the S&P 500 according to doctor Siegel.

He's one of the smartest out there we appreciate him coming on about.

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