Jeremy Siegel, the University of Pennsylvania finance professor who says stocks are the best long-term investment, says market’s 6 percent rise since Republican Donald Trump was elected as the next president is just the beginning of a strong rally.

“I think the Trump rally has a way to run,” Siegel told The Wall Street Journal.
The Dow Jones Industrial Average is up 13 percent this year, putting in on course to be the best year since 2014. Financial stocks have led the gains as investors expect President-elect Trump to repeal or rein in many of the post-crisis financial regulations enacted under President Barack Obama, the newspaper reported.

Siegel explained his bullish ideas about stocks 22 years ago in a book “Stocks for the Long Run,” which showed that over two centuries, stocks have gained 6.7 percent a year after adjusted for inflation. That’s better than the 3.6 return for U.S. government bonds and 0.6 percent for gold.

“There are a lot of bumps along the way,” he told the WSJ, but “stocks are the best long-run asset, clearly performing far better than any major asset class this year.”

He doesn’t see stocks in a bubble, despite Trump’s claims during the campaign that the Federal Reserve’s loose monetary policy had made the market too overvalued.

The trailing 12-month price-to-earnings ratio for the S&P 500 has risen to 24 times from 23 times a year earlier. That’s less than the 30 times ratio during the dot-com bubble in 1999, Siegel says.

He recommends that investors stick to passive investing strategies that steadily buy stocks during highs and lows.

“I like index funds a lot,” he said to the WSJ, recommending investors also have a global stock fund. “With two or three funds, you can really cover the world quite well.”