Jeremy Siegel predicts stock correction in 2015

Longtime stock bull Jeremy Siegel told CNBC on Tuesday he expects a correction—defined by a 10 percent drop from record highs—in 2015, but advised investors not to try to time the market. Overall, he said, he's still bullish on stocks.

"We've gone so long. I think in 2015 we'll have our 'first' correction," the Wharton School finance professor said in a "Squawk Box" interview. "People say, 'Doesn't that mean I should wait for that?' The answer is, 'No,' because if it's up 15 percent and then goes down 10 [percent], you're still better off buying today. You don't know when that's going to come."

During the Ebola scare, the stock market came close to a correction, with the S&P 500 dropping 9.9 percent from September to October.

Global stocks were under intense pressure Tuesday, after a more than 5 percent drop in Chinese equities and an 11 percent plunge in Greece. On Monday, the Dow Jones Industrial Average dropped triple-digits in its worst session since October as oil prices fell sharply in New York trading.

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"I still think, given the tailwinds we're going to have, the market looks attractive to me," Siegel said, citing lower oil prices as one of those tailwinds and discounting concern about the Federal Reserve hiking interest rates next year. "Yeah, interest rates are going to go up, but not that much." He predicted that the Fed funds rate could end 2015 at as much as 1 percent.

Ahead of Monday's selloff, James Paulsen, chief investment strategist at Wells Capital Management, said he's going "underweight" the U.S. for 2015 after being bullish for years.

Read MoreLongtime bull Paulsen raises red flag

The Dow on Friday had been less than 9 points from the key 18,000 level before trimming some gains to close at 17,958. Siegel has been predicting 18,000 before year-end.

Three weeks ago, he told CNBC that he saw favorable market trends—including the prospect for solid economic growth with low inflation—that could push the Dow past the 20,000 mark by the end of 2015. The Wharton professor's optimism last month followed a bit of doubt during the October selloff about whether his prediction of Dow 18,000 by year-end would come to pass.

On CNBC Tuesday, Siegel also said he hopes the gridlock in Washington abates in the next two years, but doubts it. "I wish we would have a grand bargain (in) these next two years on taxes and spending and long-term deficit. But do you really think the Republicans are going to be in the mood to bargain when they think they may have it all in two years." He thinks there's going to be "pretty much a stalemate" until the next president is elected.

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