Billionaire investor Ron Baron (Trades, Portfolio), who leads New York-based Baron Capital, appeared on CNBC’s “Squawk Box” Friday, where he predicted, based on historical trends over the past several decades, the Dow Jones Industrial Average will reach 650,000 in 50 years, with an over $500 trillion U.S. economy.
The investor, whose firm has $29.6 billion in assets under management, said that while “fear is evident” in the stock market, it should not deter people from investing.
According to him, the stock market is currently at the same valuation as it was in 1969, a turbulent time with “cities on fire,” Vietnam War and civil rights protests and the Dow trading around 1,000.
“The economy then was $850 billion. It’s now $21.3 trillion. That’s up 25 times,” he said. “All you had to do was believe that this country was going to survive and invest then and you would have made 25 times your money.”
As a result, Baron believes the next 50 years is “going to be similar to the last 50 years.”
“That would be 25 times your money if you invest now,” he said, adding that “extraordinarily” low interest rates currently provide even more incentive to invest.
The buy-and-hold investor also cited technology as a driver of growth because it is “making the costs be lower” for businesses compared to the traditional capital-intensive method of building physical structures in the hope they will pay off over time.
The Dow closed at 26,805.53 on Thursday, approximately 2% away from all-time highs.Â
