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The head of Merrill Lynch Wealth Management, Andy Sieg, says that the U.S. stock market has plenty of room to run higher, despite a remarkable bull rally that has taken the three main benchmarks to new heights.
‘We think there’s an upside scenario that could see the market up 20% from these level.’
That call comes even as the S&P 500 index SPX, +0.40% has rallied nearly 27% so far in 2019, putting it on the verge of surpassing its 2013 performance and producing its best calendar-year return since 1997. Meanwhile, the Dow Jones Industrial Average DJIA, +0.37% has gained more than 21% thus far and the Nasdaq Composite Index COMP, +0.54% has climbed almost 34% so far this year, according to FactSet data.
Read: MarketWatch’s snapshot of the market
“If we take a step back, we think this is a generational bull market. We think this is a 30-year cycle and we need to remember that because this has been it’s been a fantastic 10 years,” Sieg told CNBC during a Thursday morning interview.
He cautioned that the big mistake that investors tend to make in periods like this one is waiting too long to jump in.
“But the mistake we see investors make is that they are waiting to participate in the rally,” he said,
“The way we see things lining up, we’re actually more bullish than that,” he said, referring to some analysts estimates that tend to forecast single-digit annual returns.
Asked if he was conveying his investment firm’s bullish outlook for stocks to clients with sufficient gusto, Sieg said, he was “pounding the table.”
“Yeah, we are pounding the table. And we’re also trying to point to the fact that things like a 60-40 allocation [of stocks and bonds] which has been something you know clients and advisers have been talking about for a long, it may be dead,” he explained.
Check out the interview below:
