But no stock market bubble? A colleague opposes GMO co-founder Jeremy Grantham

Investor legend Jeremy Grantham is known for his gloomy market forecasts. But now one of his colleagues at the investment firm GMO has taken a more conciliatory tone and praised the stock market.

• Star investor Jeremy Grantham is pessimistic as usual
• However, one of his GMO colleagues sees a significantly improved environment
• Good prospects for investors

Boston-based GMO is considered extremely cautious Investment. As a result, a stockbroker’s gloomy predictions are now often met with only rolled eyes from many market participants. And in reality, the pessimistic predictions did not always come true. But on the other hand, GMO was one of the few companies that predicted the stock market crashes of 2000-2003 and 2007-2009. Back then, skeptics also laughed at pessimists about GMOs.

In 2023, Jeremy Grantham again made gloomy predictions. GMO’s co-founder and long-time investment strategist has repeatedly warned of a “super bubble” stretching across multiple asset classes. In this connection he stated that he S&P500 expect a drop to 3,200 points, or if some things go wrong, even as low as 2,200 points. The index, which reflects the broad US stock market, is currently at 4,740.56 points (closing level on December 18, 2023)

Colleague Grantham is more optimistic

Given Grantham’s continued bearish stance, it’s all the more surprising that Ben Inker, Co-Head of Asset Allocation at GMO, has recently appeared significantly more bullish than Grantham. In his view, the outlook for investors is very good right now, “whether you’re looking to buy an equity portfolio, a fixed-income portfolio or a diversified portfolio of different assets,” he says from “Markets Insider,” citing Morningstar Podcast Quotes “The Long View”.

As Inker pointed out, investors in various parts of the world “get paid pretty well for taking risks.” Additionally, safe investments such as government bonds and cash would also be significantly higher Returns than in previous years, giving investors more opportunities to generate returns.

Inker: US stocks fell

According to Ben Inker, the real value of US stocks has increased over the past two years. On the one hand, it depends on strength inflation together as manufactured goods and services provided by companies became more expensive. On the other hand, the real value has also been driven by US economic growth over the past two years, as public companies generally grow with the economy, according to the GMO expert.

As a result, he now rates U.S. stocks as “significantly better than they were a few years ago.” In his view, the cheapest 20 percent of stocks are “probably cheap in absolute terms,” ​​Inker says.

Finanzen.net editorial team

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