Wharton Professor Emeritus Jeremy Siegel is optimistic about U.S. stocks and economy in 2025, giving Wharton Business Daily five big predictions for 2025.
A highly influential figure in the field of investments and finance, Siegel is known for his expertise in stock market behavior and has authored several books, including "Stocks for the Long Run," which emphasizes the importance of investing in equities for long-term wealth accumulation. His research and insights have shaped the understanding of stock market trends and the benefits of long-term investing.
Siegel's work often highlights the historical performance of stocks versus other asset classes, advocating for a buy-and-hold strategy. He has also been a prominent voice during market fluctuations, providing analysis and advice based on economic principles.
As a professor at the Wharton School of the University of Pennsylvania, Siegel has influenced both academic thought and practical investment strategies, making him a respected authority in the investment community. His opinions are frequently sought after in the media, and he is considered a thought leader in finance.
- Equity Returns of 0%-10%
While Siegel does not expect the S&P 500 to repeat its 24% returns of 2024 and 2023, he does think stock returns will rise, but at a “more muted” pace of between zero and 10%.
“Though valuations are on the high side, I don’t think they’re crazy,” Siegel said. “The average stock in the S&P 500 index has a 22 P/E,” only slightly above the 20 price-to-earnings ratio that Siegel thinks is more realistic.
- Smaller Tech Stocks to Outshine
“The Magnificent 7 brought home the bacon in 2024 with average earnings of 35%. In 2025, the 493 other stocks [in the S&P 500 Information Technology Sector] could shine,” the economist said, noting they are sporting “P/Es of 18 to 20 and “smaller stocks even below that.”
- Trump Policies to Boost the Economy
Siegel is generally optimistic about President-elect Donald Trump’s pro-business policies, noting: “Trump is the most outspokenly pro-stock market president we have ever had. He measures his success against how well the stock market does. As in his first term, he is not going to pursue policies highly detrimental to the stock market.”
Just look at the National Federation of Independent Business Small Business Optimism Index, the economist suggested. As in his first term, when “it had huge jumps, some of the biggest jumps in history, it just came out with a big jump.”
- Trump Tariffs a Negotiating Tool
In Trump’s first term, he imposed tariffs that the Biden administration continued, Siegel notes. Despite Trump’s saber-rattling about a new round of tariffs, Siegel believes this is largely a negotiating tool.
Trump “loves to come in with a very strong positions and negotiate from there –and he has to be aware of the inflationary consequences on the consumer and the repercussions on businesses.”
- Trump the Peacemaker
As for Trump’s promise to deescalate the wars in Ukraine and Gaza and to defuse tensions in Taiwan, Siegel said Trump may success in helping these regions reach peace agreements, and that the markets have already indicated this by continuing to rise.
World stability would be a further boon to stocks, Siegel said.
Lee Barney ✉
Lee Barney, Newsmax’s financial editor, has been a financial journalist for 30 years, covering the economy, retirement planning, investing and financial technology.
© 2025 Newsmax Finance. All rights reserved.