Finance professor Jeremy Siegel, who thought the Dow Jones Industrial Average could rise as high as 15,000 just last month, now thinks it can go to 17,000 in 2013.
Valuations are attractively low, the University of Pennsylvania Wharton School professor said, making this "one of the cheapest stock markets I've seen."
"Dividend-paying stocks, value stocks, the entire market is very attractive," he said.
The former adviser to 2008 Republican presidential hopeful Sen. John McCain of Arizona has long been bullish on the market. He told CNBC Thursday that while his optimism was temporarily "derailed" by last year's earthquake and tsunami in Japan and concerns over Europe, Japan is recovering and the euro "crisis was put off" thanks to the European Central Bank injecting some liquidity into European banks.
Where Siegel sees storm clouds are bond funds, which had been doing well until two to three weeks ago.
"I don't see how [interest] rates can stay this low," he said, adding he wouldn't be surprised by some sort of announcement of a rate increase during the U.S. Federal Reserve's April meeting.
"When the Fed starts tightening there might be ripples in the market," Siegel said, but he isn't worried about inflation , even if it gets up to 4 percent.