Stock market legend Jeremy Grantham has predicted that over the next 20 years, the stock market will break a lot of hearts. Mark Decambre of MarketWatch writes:
Jeremy Grantham, an investor credited with predicting the 2000 and 2008 downturns, told CNBC on Thursday that investors should get inured to lackluster returns in the stock market for the next two decades, after a century of handsome gains.
“In the last 100 years, we’re used to delivering perhaps 6%,” but the U.S. market will be delivering real returns of about 2% or 3% on average over next 20 years, the value investor and co-founder of Boston-based asset manager GMO told CNBC in a rare interview.
Over the past five years, the S&P 500 index SPX, +0.47% has produced a compound annual growth rate of 8.1%, the Dow Jones Industrial AverageDJIA, +0.31% has boasted a CAGR of 9.1%, while the Nasdaq Composite IndexCOMP, +0.34% has registered a compound return of 11.4% over the same period, according to FactSet data.
Grantham attributed his call for lower future returns to a stock market he still views as pricey, despite a downturn that gripped the broader market in the latter portion of 2018.
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