Wharton finance professor Jeremy Siegel is predicting Dow 35,000, but he warns Wall Street will have to cope with a near-term setback first.
"All you need is a few little disappointments when the market is going straight up," he told CNBC's "Trading Nation" on Monday. "There is a little bit of nervousness in front of tomorrow's Georgia elections."
It's situation that could rattle investors.
Siegel believes the Georgia runoffs, which will determine which party controls the U.S. Senate, may go in favor of the Democrats. If this happens, he predicts it could spark a 5% to 10% pullback.
"On the prediction markets, the Republicans have fallen quite a bit back in the last weekend," said Siegel. "If Democrats take both of them [seats], we will have a tax increase. We will have a corporate tax increase and capital gains increases."
However, Siegel expects any pain to be temporary. He sees extra spending by a moderate, all-Democratic government and massive fiscal and monetary coronavirus aid offsetting tax increases.
"It's all that liquidity that's been provided in 2020," the longtime bull added. "The Dow could easily tack on another 10% or 15% [in 2021]."
Siegel, who led the Dow 20,000 rally cry more than four years ago, cites Covid-19 vaccines benefiting economic reopenings and President-elect Joe Biden's infrastructure spending plans as major positive catalysts for cyclical market groups.
"Don't forget the Dow is a little less growth, a little less tech-oriented," Siegel said.
On Monday, the index fell 1.25% to 30,223.89, marking its first negative start to a year since 2016.