In his recent annual interview with Advisor Perspectives, Wharton Professor of Finance Jeremy Siegel discussed a number of topics including bond yields, secular changes, movement out of cities into suburbs, inflation and interest rates, and the performance of value investing in 2021. Here’s a couple of excerpts from the interview:
What about value versus growth?
I also thought value would finally outpace growth this year. But the pandemic was obviously a dream come true for growth and tech investors. These firms bridged the gap and were critical to maintaining commerce. But we’ll get a substantial reopening of the economy by the middle of next year and a complete reopening by the end of the year. Value stocks will also benefit from investors searching for yield. I believe value will outperform growth stocks in 2021.
Is the multi-decade bull market in bonds over?
I strongly believe the 40-year bull market in bonds, which started in 1981 with the 10-year yield at over 16%, has ended. We will never in our lifetime, and maybe our children’s lifetime, see long-term Treasury yields as low as we saw them this year. I see higher inflation and stronger economic growth that spells the end of this long bull market.
By the way, the bull market in bonds was the longest bull market of any major asset class in world history. It had interruptions, but we went from 16% to 0.5% in 39 years. But I believe this year we hit bottom.
You can read the entire interview here:
For all the latest news and podcasts, join our free newsletter here.
Don’t forget to check out our FREE Large Cap 1000 – Stock Screener, here at The Acquirer’s Multiple: