2006 & 2012 - Jeremy Siegel

Our society appears to have developed a case of collective attention deficit disorder. Older generations trained their brains to find instant gratification through fast food, microwave meals, and television remote controls. Younger generations seem to conduct their lives moment-to-moment on smart phones and Facebook, where they can share and “tweet” even the most mundane of everyday activities to a cadre of followers in their pursuit of instant approval and validation. The media is obsessed with instant response to every event, trying to extrapolate dramatic short-term happenings into a long-term trend. Investors can be excused if they have a difficult time following the advice from Peter Lynch provided above. Too often, their instinct is to let emotions and short-term thinking cloud their better judgment.

One person who has avoided the obsessive focus with the here-and-now is Dr. Jeremy Siegel, Professor of Finance at the prestigious Wharton School of Business. Professor Siegel is one of the world’s most prominent authorities on economic and financial markets, and author of Stocks for the Long Run, named one of the ten best investment books of all time1. As the featured guest at this year’s recently held annual MPMG Speaker Series event, Dr. Siegel presented evidence as to why stocks, despite short-term periods of underperformance and high volatility, have been the greatest wealth creation vehicle in recorded history. In fact, equities have delivered almost twice the annual return of the next best asset class – bonds.

In addition, his data supported the thesis that stocks are undervalued based on historical metrics, particularly given today’s low interest rate environment. Finally, Dr. Siegel illustrated how the strength of emerging economies is changing the composition of world wealth and consumption, with developed economies like the United States and Europe becoming smaller components of a much larger global marketplace.