S&P 500 poised to plunge 17pc this year: Grantham

The popping of the bubble in US stocks is far from over and investors shouldn’t get too excited about a strong start to the year for the market, warns Jeremy Grantham, the co-founder and long-term investment strategist of GMO.P 500 at the end of the year should be about 3200, he says in a paper out on Tuesday . That would equal an almost 17 per cent full-year drop and a 20 per cent decline for the year from current levels.

Value strategies struggled with lacklustre returns in the decade following the global financial crisis as growth stocks led the longest bull market in US stocks on record. But now, as the Federal Reserve tries to tame elevated inflation with aggressive interest-rate increases, value strategies are enjoying a revival.

“In the range of value versus growth, value is still much more attractively positioned than growth,” he explained. “It’s gone half the way back, but it’s still cheaper.” Value stocks could outperform growth ones by 20 percentage points over the next year or two, he added.

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Source: SkyNewsAust - 🏆 7. / 78 Read more »