Jeremy Siegel is the Russell E. Palmer Professor of Finance at the Wharton School of the University of Pennsylvania and a senior investment strategy advisor to Wisdom Tree Funds. His book, Stocks for the Long Run, now in its fifth edition, is widely recognized as one of the best books on investing. It is available via the link on this page. He is a “Market Master” on CNBC and regularly appears on Bloomberg, NPR, CNN and other national and international networks

This is my 13th annual interview with Jeremy, which we do just before Thanksgiving. He has been one of the most prescient forecasters among those featured in Advisor Perspectives. You can access our prior interviews here: 2019, 2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008

I spoke with Jeremy on Thursday, November 19th.

When we spoke a year ago, the S&P was at 3,119. This morning it was at 3,562. That's a gain of 14.2%. Last year you said the market was fairly valued; despite that it went up nicely. What are you seeing in the market’s valuation?

We have to marvel at how well the market’s done despite the recession and COVID crisis. I appeared on the networks in June to say that the Fed’s huge provision of liquidity, supported by the government's CARES Act, would be very positive for the equity market. I looked at the growth of the money supply and I said, “This liquidity is going to go first into assets and then, in 2021, when the vaccine comes, into the economy.” We know that stocks are the longest-lived assets – and they are anticipating a great 2021. I predict the bull market will continue next year. Stocks are not overpriced.

As you mentioned, the economy was helped significantly by fiscal and monetary support. Do you expect further support and if not, what does that say about economic growth?

It's a big disappointment that there was not a second round of fiscal support. Before the election there was political positioning between Pelosi, Trump and other Republicans, when the virus was relatively quiescent. Had they known the surge we're getting now, maybe they would have come to some deal. I'm not going to give up hope, although I think it's a long shot that we will have something before January.

That said, we can survive it. It will mean slower growth in the fourth quarter. It may mean a slight dip in GDP growth. But again, that does not mean that 2021 won't be strong. I'm very encouraged by the vaccine results that we have seen and this strengthen the case for a robust 2021.

Looking even further, what do you see will be the permanent, secular changes that we should expect in the economy?

The pandemic accelerated trends that were in place, but it also started new trends. Obviously, the trends towards the decline in traditional retail and the surge of online buying were accelerated. But the ease with which so many people, white-collar workers in particular, can work at home, has caused us to rethink office-space requirements and the amount of time people need to spend commuting, getting to and from their offices. Office space is going to be challenged for a long time. I also think that business travel is going to be down for an extended period.

In fact, the market for commercial real estate may never recover, as people realize that they can do effective Zoom meetings far easier than they can travel somewhere. Those are permanent changes. However, I believe leisure travel will come back completely. Theme parks will come back; restaurants will come back, although not the same ones. But Business travel and office buildings will be permanently down.