Long-term interest rates should remain low amid positive fundamentals for bonds, says financial market guru Jeremy Siegel, a finance professor at University of Pennsylvania.

"Everyone expected the 10-year [Treasury yield] to be 3.5 percent by now on its way to 4 percent. It's closer to 2.5 percent," he tells CNBC. The 10-year yield stood at 2.63 percent Thursday morning and touched a two-month low of 2.57 percent Monday.

Siegel admitted that he was part of the chorus predicting higher yields. "Now I think we're going to have low interest rates on that long-term [bond] for quite a while now no matter what [Federal Reserve Chair] Janet Yellen says," he argues.

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And what's going to keep rates low? "Growth is going to be slow, . . . inflation is going to be low and there's the aging of the investor class," Siegel notes. Older investors often turned to bonds for safety.

"The baby boomers, which still control most of the wealth, [are] getting to 65 and saying, 'Yeah, stock prices may be a better deal, but I've got to be conservative.' That push on to bonds is going to keep a lid on their rates,"

The bullish backdrop bodes well for stocks, he explains. Siegel is sticking to his year-end forecasts of 18,000 for the Dow Jones Industrial Average and 2,000 for the S&P 500.

Others are less positive on stocks. Jim O'Neill, former chairman of Goldman Sachs Asset Management, says he wouldn't buy U.S. equities now.

If the S&P 500 falls for the first five days of January, research shows there's a 50 percent chance it will decline for the year as a whole, he tells MarketWatch. And that's what happened this year.

"It adds to my view that I don't know what's going to happen with the U.S. market, but it wouldn't surprise me if it goes down," O'Neill states.

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