Author and Wharton Professor Jeremy Siegel thinks the stock market could get a nice boost next month as investors who followed the old “Sell in May and go away” adage return to the market.
“When you take a look equity positions of a lot of money managers, they’re still underinvested in stocks,” Siegel tells CNBC. “Remember the old saying, ‘Sell in May and go away’? It worked for two years. A lot of people did that. They want to come in again in October, and they find themselves way behind the 8-ball given this summer rally.”
Siegel also says he thinks his previous predictions about the Dow Jones Industrial Average hitting 15,000 or 17,000 by the end of 2013 are looking better and better. “We only need to go up 10 percent from current levels [to hit the 15,000 level],” he said. “I’m not saying it’s a slam-dunk. Nothing’s a slam-dunk in the market.”
“The 17,000 [prediction], when I first gave the prediction late last March, I said it was a 50-50 proposition,” he added. “But I think that that’s a goal that is very, very attainable given the market circumstances. That’s what the statistics show, that there was almost a 50 percent chance on past historical valuations and periods that the market would reach that 17,000 by the end of next year.”