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Jeremy Grantham Forecasts Rough Seven Years For Equities, Bonds

TedTed
in Fund Discussions
FYI: eremy Grantham isn’t shaking his reputation as a perma-Bear.

His firm, Boston-based GMO, is out with its latest seven-year outlook and it doesn’t make for happy reading. GMO expects the annualized, inflation-adjusted return for U.S. stocks to be negative 4.2 percent over the period. U.S. bonds are forecast to lose 0.5 percent a year while emerging-market stocks, long a GMO favorite, are expected to climb 1.9 percent annually.
Regards,
Ted
https://www.fa-mag.com/news/jeremy-grantham-forecasts-rough-seven-years-for-equities--bonds-38168.html?print

Comments

  • VintageFreakVintageFreak
    So basically we should be 100% invested in Emerging Markets for a 2% return???
    WTF not simply buy a CD ladder?
    Why does GMO not recommend that? I think we can lock in that rate now.
  • Old_JoeOld_Joe
    But wait! What about "ETF Manager Renounces Emerging Markets To Pile Into Gold"??
  • catch22catch22
    Okay, so cool for we investors (we've been warned).....what are the financial system ramifications which should flow over into a broad economy, which would flow into the social side of things. Reads like a move to the dark side of life.
  • LewisBraham
    @VintageFreak Note that GMO's forecasts always are for "real returns," which are returns adjusted for inflation. So a 2% real return would be 5% net if inflation is 3%.
  • VintageFreakVintageFreak
    @LewisBraham Point.
    However, if markets start tanking I doubt Fed will inflation get out of whack.
    In any case I thought GMO has been saying this for at least a couple of years now. Some day/year they will be right I suppose.
  • AndyJ
    Also keep in mind GMO's forecasts are for broad asset classes, and in the case of bonds, very broad asset classes. Even if GMO's nailed it for broad classes, the Pimcos et al. of the investment world aren't necessarily stuck with those returns.
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