2022 was a painful year in financial markets with almost all traditional assets delivering significant losses.
Value equities are still priced for significant outperformance, globally.
The U.S. dollar has been on a tear in recent months, bringing it to its highest valuation versus other major developed currencies in more than 35 years.
As one of us points out relentlessly, risk isn’t a number, rather it is a notion or a concept.
What do Netflix, Peloton Interactive, Coinbase, and Palantir Technologies have in common?
As we turn over the page to a new year, there are plenty of decisions that investors will need to make.
This quarterly is a piece written by my Asset Allocation co-head John Thorndike. In it, he explains the rationale behind our strong preference for non-U.S. stocks despite the stellar performance the U.S. stock market has delivered over the last decade. The research behind the piece is an example of the bread and butter of our historical asset allocation analysis.
After several strong quarters for value stocks, the last few months have seen a sharp reversal in favor of growth.
Speculative booms provide both entertainment and outsized profits while they are happening, but they do generally burst painfully,” Inker writes. “Speculative booms provide both entertainment and outsized profits while they are happening, but they do generally burst painfully. This is particularly true in equity markets, where the demand growth is ordinarily met with increased supply from savvy capitalists. Maintaining excess demand in the face of growing supply becomes ever more difficult and eventually proves impossible.
It is commonly assumed that growth stocks are bigger beneficiaries of falling interest rates than value stocks, an assumption driven by a belief that growth stocks are much longer “duration” than value stocks due to the fact that more value in growth companies comes from relatively more distant cash flows.
GMO’s new quarterly letter to clients examines the worst 12-month performance for value stocks in history and explores how investors can profit from a period reminiscent of previous bubbles in global markets.
In a new quarterly letter to GMO clients, head of asset allocation Ben Inker highlights the sea change in the utility of government bonds and Matt Kadnar, member of GMO’s Asset Allocation team, weighs in on today’s low bond yields.
In a new quarterly letter to GMO clients, Ben Inker, head of asset allocation discusses the current uncertainty over the market and economic outlook and the decision to significantly reduce net equity exposure in the GMO Benchmark-Free Asset Allocation Strategy. Alongside Inker’s letter, Jeremy Grantham writes in “The Virus, The Economy and The Market” ...
On May 5 at 2pm ET, Ben Inker of GMO will answer advisors’ questions about market valuations and asset allocation.
Ben Inker is head of Boston-based Grantham Mayo Van Otterloo’s (GMO's) asset allocation team. In his years at GMO, Ben has served as an analyst for quantitative equities and asset allocation, as a portfolio manager of several equity and asset allocation portfolios, as co-head of international quantitative equities, and as chief investment officer of quantitative developed equities. He earned a bachelor's degree in economics from Yale University and is a CFA charterholder.
In a new white paper from GMO’s Asset Allocation team -- "It's Always Darkest Before the Dawn" -- Ben Inker, Catherine LeGraw, John Pease and John Thorndike examine the three phases of bear markets against the backdrop of the current market environment.
GMO’s Ben Inker discusses the recent turmoil in financial markets and the firm’s perspective on valuations amid the sharp declines in many asset classes.
The years leading up to the 2000 stock market bubble were extraordinary and unprecedented. They caused unique pain to the portfolios of valuation-driven investors. The valuation extremes, though, created the greatest opportunity set for valuation-driven investors since the Great Depression.
Ben Inker highlights the multiple benefits large U.S. companies enjoy when compared with smaller ones, and examines whether the conditions that have caused this situation will remain in place.
Investors have a tendency to obsess about their investment portfolios. On the surface, this is a perfectly reasonable focus given results in the portfolio are a crucial determinant of success for whatever purpose the portfolio is there to serve.
In a new quarterly letter to GMO’s clients, head of asset allocation Ben Inker looks back on a confounding 2018 and discusses how to assemble a portfolio of attractive assets looking ahead.
Emerging equities are more volatile than developed market equities. This owes little to the volatility of emerging stock markets in local terms and much more to the strong positive correlation between their local stock markets and movements in their currencies. The spring of 2018 was a classic example of this, with US dollar strength driving significant emerging weakness.
In a new quarterly letter to GMO's institutional clients, head of asset allocation Ben Inker reflects on a change in the investment environment in the first quarter, characterized by a rise in volatility and a significant shift in the correlation between stock returns and bond returns ("Is Investing Starting to Get Difficult Again? I Hope So").
Inker, the head of GMO's asset allocation team, warns that a full-blown trade war "is probably more dangerous for investors at this time than at any other time in recent history."
In a new quarterly letter to GMO's institutional clients, head of asset allocation Ben Inker considers the hypothetical question posed by chief investment strategist Jeremy Grantham in his third-quarter 2017 letter, "What should you do if you are tasked with managing Stalin's pension portfolio?" ("Don't Act Like Stalin! But maybe hire portfolio managers that do?").
In a new quarterly letter to GMO's institutional clients, head of asset allocation Ben Inker discusses why investors should be thinking about the risks of surging inflation, even if such a surge may not be inevitable or even probable. Chief investment strategist Jeremy Grantham considers the current market environment and how to most rationally take risk with the ultimate stakes on the line.
Emerging Value and Margin of Superiority by Ben Inker and Why Are Stock Market Prices So High? by Jeremy Grantham
In a new quarterly letter to GMO's institutional clients, head of asset allocation Ben Inker addresses "perhaps the most common question I get from clients: What keeps you up at night?" ("Up At Night").
GMO Quarterly Letter by Ben Inker and Jeremy Grantham
GMO Quarterly Letter from Ben Inker and Jeremy Grantham