Jeremy Grantham and his bright folks at GMO, which manages billions, have just updated their 7 year return forecasts for different asset classes. They are predicting a NEGATIVE real return on stocks over the next 7 years, based on current valuations. Jim Cramer and the rest of the CNBC crowd would scoff at this outrageous prediction. Everyone knows stocks for the long run always works. Don’t fight the Fed. We’ve reached a new permanent high.
I take you back in time to yesteryear. It is December 31,1999. The Fed has been lowering interest rates in order to alleviate all of the Y2K impacts to computers and businesses around the world. Your brother in law is day trading Dot.com stocks. The stock market is hitting new highs every day. What could possible go wrong in this new and exciting internet age? Jeremy Grantham and his bright folks at GMO come out with their 10 year return forecast and predict that stocks will provide a NEGATIVE 1.9% real return over the next decade. They are laughed at and scorned. Please see the actual results versus their predictions below.
Who are you going to trust? Jeremy Grantham or Jim Cramer and his Wall Street shyster buddies?