GMO’s 7-Year Asset Class Forecasts: Higher Prices and Lower Rates Dim Expectations

“GMO’s 7-Year Asset Class Forecasts for both stocks and bonds have generally declined in 2019, predominantly due to strong appreciation in asset prices,” said Rick Friedman from GMO’s Asset Allocation team.

“With global equities up nearly 17% through July (and a more impressive 19% in the US) and interest rates lower globally, our forecasts for US and international stocks have declined as has our outlook for bonds (US, International hedged and Emerging). We continue to favor Emerging Market Value stocks which are trading cheap relative to our long-term equilibrium assumptions. In addition, International Value and US Small Cap Value stocks look attractive from a relative perspective.”

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