Jeremy Siegel On Coronavirus Impact: ‘Severe One-Year Shock, Then A Bounce Back’

Professor of finance at the Wharton School, Jermey Siegel, can see a future where equity prices drop as much as 30% in 2020.

On the bright side, Siegel only sees this as a one-year impact.

“I see this as a very severe one-year shock, and then a bounce-back that could be extremely rigorous,” said Siegel.

Siegel continued, “This could be a really tough year, but 2021, ’22 onward, there’s no reason not to say we’re going to snap back from this.”

“We always have.”

Siegel’s concern comes amid the outbreak of COVID-19, the coronavirus in the United States.

Siegel, as of now, believes that the coronavirus won’t trigger a recession.

“Long-term uncertainty is not at all increased as a result of this virus,” said Siegel.

Siegel added, “If you’ve got some cash now, time to put it to work. Don’t get nervous if it comes down another five or 10%.”

Siegel was also among the voices calling for a rate cut from the Fed.

“I think the Fed should act again. Let’s make some room there for easing on the financial side,” said Siegel.

The Fed did enact a surprise rate cute of 50 basis points on March 3rd.

The rate cut created a panic and caused a mass-market sell-off.

The Fed’s reasoning behind the 50 basis point cut was that “the coronavirus poses evolving risks to economic activity.”

‘Very nasty for most investors’

Not all financial advisors are pushing forward the idea that investors should be investing their capital amid the coronavirus dip.

BK Asset Management’s Boris Schlossberg is actively telling his clients to stay away.

“We have been conditioned as investors for the last ten years to buy the dip continuously,” said Schlossberg.

Schlossberg continued, “If this is the year that breaks that behavior, that’s going to be very, very nasty for most investors.”

“If you have a couple of failed buy-the-dip situations going forward this year, it’s going to really create a very sour sentiment, and you’re going to have much steeper declines than people believe. So, to me, we’re really at a very key cusp here in the markets.”

Iaccino: Bitcoin a Better Hedge Than Gold? Look at the Data

Bob Iaccino, editor of the Stock Think Tank, sees the relative stability of Bitcoin compared to gold as a sign that its legitimacy as a hedge is coming into view.

costco cost

The Dividend Stock That Belongs in Every Portfolio

If you are like me, then you are always looking for great companies that are on sale. What makes the company a bonus buy is when it also pays a

Bitcoin and Gold Slaying Stocks: Why Not Own Both?

The Bitcoin vs. gold battle rages on as the two are best-performing assets of 2020. The price of gold is up 26% this year, while Bitcoin has soared 87% —

Companies Pile On Debt. Big Headaches Later for Investors?

How have companies handled the cash crunch during this pandemic? I came across an insightful in-depth research report this past week that had a few interesting charts on this. See

Potential Options Payoff in Post-Covid China Rebound

The Chinese economy is starting to show signs that it is rebounding better than other economies around the world. China was the first country that had to battle the COVID-19

Retirement Income Tip: Buy High-Yielding Dividend Stocks

Imagine a scenario where you can make money while you sleep. Sounds too good to be true, right? Enter high-yielding dividend stocks. Now, there are lots of stocks in the

Beat the S&P 500 with These Specific Stocks

Today I'm going to briefly discuss a major error that most stock market participants make on a regular basis and ways in which you can substantially increase your stock returns.

Iaccino: Dollar Down, Stocks Higher, Plus PayPal Meets Bitcoin

A renewal of federal stimulus on top of monetary stimulus after the election is likely to support the stock market, says Bob Iaccino, editor of the Stock Think Tank. The

investor or pay off debt

Invest or Pay Off Debt? In a Pandemic, I’m a Stock Buyer

If you were to tell someone that you were putting any extra cash you had into the market instead of paying off debt, they might think you have lost your

bitcoin mass adoption

Bitcoin Mass Adoption Can’t Be Far Off — That Means Surging Demand

When you look at past technological developments — from the 19th century industrial revolution through the introduction of the telephone, personal computers, Internet, and smartphones — there is a typical

stocks overvalued

Is the Stock Market Overvalued? Not By This Measure

You many have heard the term “TINA” mentioned in various financial and investment commentaries in recent months. This is an acronym for “There is No Alternative.” It is built around a

clx options

Options Play: Take Advantage of Bearish Sentiment On Clorox (CLX)

We are in the middle of a global pandemic and one of the best weapons against the virus is cleaning surfaces with bleach. If we were to ask 100 people