Stocks are not at fair market value just yet, but they are closer than they have been in the last six years, which will make for a harder climb to 20,000, he said.
"The last three, four years, I thought this was easy. I mean, it was a slam dunk. The market was so undervalued with the interest rates so low, and earnings momentum going up. ... Earnings momentum is going up, but we are closer to fair market value," he said.
Siegel projected this time last year that the Dow industrials would hit 18,000 by the end of 2014; the index hit that milestone on Dec. 23.
Siegel sees stocks remaining below fair market value because interest rates will remain permanently lower than what they should be.
"I think we're going to see Fed funds long run maybe 2 percent instead of 4 percent, and that lower interest rate is going to feed people to move into stocks," he said.