Jeremy Grantham of GMO had some good macro thoughts on the markets over the weekend in Barrons. To summarize his views:
- The Greenspan-Bernanke-Yellen Put is well in place and driving irrational sentiment.
- The bullishness at present is driven primarily by institutional investors.
- US stocks are “65% overpriced.”
- US stocks won’t be in a “true bubble” until they’re 100% overpriced.
- GMO’s 7 year forecast continues to call for poor equity market returns.
- GMO has an equity weighting that “will be down to about 38%” by October if nothing changes this year.
- Bonds of all types are much riskier in this environment than many think.
Read the full piece here.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.