The market recovery is under way and will launch a 10-year bull market, says Neil Hennessy, the chairman and CEO of Hennessy Advisors of Hennessey Funds.
The market is only beginning its 10-year bull, he told Yahoo! News.
"The good news is that there's no confidence out there," he says.
"The real good news is that there's a lot of money on the sidelines. I think we're in for a sustained rally.”
At the end of the 10-year run, Hennessy predicts the Dow Jones Industrial Average will have doubled.
Investors will turn back to buying stocks since low interest rates make it more appealing than buying government bonds, he said.
Investors are still holding onto a large amount of cash, he notes.
Hennessy said it makes no sense to invest money into a 30-year U.S. government bond at 4 percent and have to wait 30 years for the investment.
A better opportunity is the Dow Jones Industrial Average because its 30 components are yielding a 3 percent dividend now.
Meanwhile, Carl Weinberg, chief economist at High Frequency Economics, is worried investors are too optimistic about a comeback in Europe, the Wall Street Journal reported.
Investors should not forget about increasing deflationary pressures, he said.
Stocks could face a decline in the near future, he said.
“In a deflation or low inflation environment, bond yields should tumble as stock prices fall — watch out!" he wrote.
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