Despite a two-year rally, stocks are still undervalued and can gain as much as 20 percent in the near future, says Wharton School finance professor and economist Jeremy Siegel.
Stocks often become unattractive when interest rates climb, and Federal Reserve officials will raise them sooner or later.
But with interest rates near zero today, any Federal Reserve moves to tighten won't bruise share prices since many companies can absorb smaller increases in borrowing costs.
So buy stocks.
"I think they are underpriced. I actually think they're very attractive particularly relative to bonds," Siegel tells CNBC.
"Relative to bonds, relative to money markets, I think I would have been a tiny little boy — in the '50s — before I have seen markets as attractive as they are now," he said.
"We went from overvalued, in my opinion, to way undervalued in March of 2009 to still undervalued today — not as much — but still undervalued today," he says.
"I could see another 10 to 20 percent in the market to get it just to a fair value."
The U.S. economy is in a temporary soft patch, but it will gradually improve, Siegel says. "I do think the second half is going to pick up."
Still, don't expect the economy to bounce back like it did from past recessions in the 1970s and 1980s.
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The nature of recovery is different this time, with jobs creeping back to more value-added sectors of the economy like manufacturing and services, and less in the construction sector. "Service sector jobs bounce back slower. We have to have some patience."
Unemployment rates have been a headache for the Obama administration.
They rose to 9.1 percent in May from 9.0 percent in April even though the economy officially emerged from the recession in March of 2009.
Companies say they want to hire, but complain that U.S. applicants lack the skills they need.
"Employers are being very selective about hiring, and they want to hire people who are good at a lot of things," says Jonas Prising, Americas president for top staffing firm ManpowerGroup, according to USA Today.
For the 45 percent of the unemployed who have been out of work for six months or longer, no knowledge of Excel spreadsheets or financial software or computerized factory machines means they could remain stuck glancing at want ads over morning coffee instead of a to-do list for a day at work.
"The job they left doesn't exist anymore," staffing consultant Harry Griendling, CEO of DoubleStar, tells USA Today.
Still, others agree with Siegel that the U.S. economy will crawl out of its soft patch and gain at least some steam by the second half of the year.
"We've seen the bulk of the slowdown…. I think we're going to reaccelerate," says Mark Zandi, chief economist at Moody's Analytics, according to Yahoo’s Ticker. "The consensus is overly pessimistic."
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