The market has spent much of 2022 worrying about inflation and associated interest rate rises, and Growth stocks have certainly borne the brunt of this.
In a new piece, GMO’s Asset Allocation Team notes that even with the battering of growth stocks in 2022 there is still ample opportunity to benefit from betting on cheap value stocks versus expensive growth names.
Over the past decade it has seemed like Value investors have been very much left on the sidelines, bemoaning rampant speculation and valuations untethered from fundamental reality, while Growth investors have, quite frankly, been living it up in some style.
A new piece from the GMO Asset Allocation Team discusses value traps, growth traps and which are worse for investors.
GMO Asset Allocation team presents a chart of four major U.S. equity bubbles dating back to 1929, illustrating just how long it really takes for investors to climb back to historical levels of return.
GMO Asset Allocation Team examines the fact that although every bubble is unique, classic common threads also run through everyone.
In a new Insights piece, GMO’s Asset Allocation Team addresses a common response to bearishness in the current markets.
GMO 7-Year Asset Class Forecasts: Value vs. growth is coming off its worst year ever.
While real return forecasts for broader markets are not particularly promising, there are some pockets that look more attractive than others. As GMO put it in the firm's recent Quarterly Letter, "Value is cheap, no matter where you look."
We believe this is the best opportunity set we’ve seen since 1999 in terms of looking as different as possible from a traditional benchmarked portfolio.
The GMO Asset Allocation Team has released its latest 7-Year Asset Class Forecast through July 2020.
The GMO Asset Allocation team has released its latest 7-Year Asset Class Real Return Forecasts through the first quarter of 2020.
The GMO Asset Allocation team has released its latest 7-Year Asset Class Real Return Forecasts
“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.
Our forecasts have come down due to the extraordinary performance of equities and credit in the first quarter. However, we continue to find pockets of opportunity across equities: we believe value stocks are trading at attractive levels globally, and emerging markets value stocks are priced to deliver more than 7% above inflation.
Most global equity markets declined in the first quarter despite the corporate sector generally reporting reasonable fundamental data. As a result, GMO's 7-year equity forecasts mostly improved over the first quarter. Even with these improvements, International and U.S. equities are still forecast to have flat to negative real returns over the next 7 years, with Emerging equities remaining an exception, forecast to have a positive real return of 1.9%.