What does this mean? Are we stuck in a new market paradigm, where volatility rules? Will stocks climb only to plunge sharply in a year?
Not quite, if Grantham Mayo Van Otterloo, the investment firm founded by Jeremy Grantham is to be believed. GMO thinks the U.S. stock market will post an average return of 6.5% through 2030 — better than any other major asset class. In other words, stocks will still have a sustained rise in the long run — as they always have, historically speaking. As long as investors don't flee at the first sign of trouble, there's still money to be made even amid today's turbulent times. Investors just have to hang tight and ride out this storm.