Jeremy Siegel and Jeremy Grantham are Now Close to Agreement

By on February 28, 2009

Jeremy Grantham was correctly bearish when he debated the valuations of stocks with Jeremy Siegel two years ago. Brett Arends points out the two are seeing eye to eye these days as Grantham has said stocks are now reasonably priced.

On Monday Mr. Grantham’s firm, GMO, published its latest prediction of seven-year investment returns. He sees emerging markets, international small caps and “high quality” U.S. stocks gaining nearly 11% a year in real terms. Mr. Grantham also likes international large caps and broader U.S. markets, which he predicts will beat inflation by 9% and 7% respectively. However, Grantham has made a point to advise investors that the S&P 500 could sink as low 600 before stabilizing.

Siegel’s book, Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long Term Investment Strategies, 4th Edition convinced many to invest their hard-earned money in the market when it was published in 2002. It appears the long run could be a very long time for them to get their money back if they don’t panic and sell now and lock in their losses.

In fact its been so bad that an investor who invested at anytime after 1995 would have been better off in a money market fund.


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