As inflation-adjusted U.S. bond yields climb to their highest levels in nearly 15 years, some investors are wondering whether owning stocks is still “worth it” over the long haul. The answer, according to University of Pennsylvania Wharton School finance professor Jeremy Siegel, is, “Yes, absolutely.”
Long-term gains for stocks have historically outpaced those for bonds by a substantial margin, even during periods in markets history where yields were much higher than they are today. Siegel argued that’s reason to ignore short-term price fluctuations, including the selloff that has caused the S&P 500
SPX
to trim its year-to-date gain by roughly five percentage points over the past three weeks, according to FactSet data. And with higher interest rates and stronger workforce productivity expected to become permanent features of the U.S. economy, Siegel says the outlook for stocks compared to bonds is becoming more compelling, not less. “Certainly the gap between bonds and stocks has narrowed from what it has been in recent years, but there’s still a decided advantage to owning stocks,” Siegel said Monday in a phone interview. Meanwhile, as investors wait to hear from Fed chief Jerome Powell on Friday, Siegel said he doesn’t expect much of a market reaction, likely because the central bank still has a month’s worth of economic data to digest before its next meeting. However …
Article Attribution | Read More at Article Source
Long-term gains for stocks have historically outpaced those for bonds by a substantial margin, even during periods in markets history where yields were much higher than they are today. Siegel argued that’s reason to ignore short-term price fluctuations, including the selloff that has caused the S&P 500
SPX
to trim its year-to-date gain by roughly five percentage points over the past three weeks, according to FactSet data. And with higher interest rates and stronger workforce productivity expected to become permanent features of the U.S. economy, Siegel says the outlook for stocks compared to bonds is becoming more compelling, not less. “Certainly the gap between bonds and stocks has narrowed from what it has been in recent years, but there’s still a decided advantage to owning stocks,” Siegel said Monday in a phone interview. Meanwhile, as investors wait to hear from Fed chief Jerome Powell on Friday, Siegel said he doesn’t expect much of a market reaction, likely because the central bank still has a month’s worth of economic data to digest before its next meeting. However …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]