Jeremy Siegel is a Wharton finance professor and advisor to New
York-based exchanged traded fund (
. He is an optimist when it comes to the U.S. and global economic
recovery and gives us his thoughts as to why he is bullish.
Siegel acknowledges that the euro is in deep trouble,
reports Olivier Ludwig of Index Universe
. However, he believes that some European stocks are a buy.
According to Siegel, European companies that primarily export will
be very competitive due to a lower euro.
In the United States, Siegel believes that a growth trajectory
is firmly in place. He even goes so far as to say that growth could
top 4% in the second quarter and the second half of the year. That
is way above estimates in the low 3% range. The key, he says, is
that the recovery is now self-sustaining, no longer dependent on
tax cuts and cash for clunkers.
Siegel also notes that emerging markets are doing extremely
well, especially in Asia. Emerging markets' GDP is now above the
peak of the previous economic expansion that ended in 2007. He
thinks that overall growth in developing countries could be as high
as 5 to 6 percent; in Asia, 7 to 8 percent; and in China, 9
In terms of the euro, Siegel thinks one remedy to the situation
could be developing two levels of the euro, where one is valued to
the other. One type, the "core euro" would be used among all the
core countries that are fiscally in good shape. The second type,
the "old euro" would be used among countries like Greece.
Investors who concur with Siegel can look into the
WisdomTree International Hedged Equity Fund (NYSEArca:
, which is bullish on certain European stocks but hedged against
Sumin Kim contributed to this article.