Investor: The Next 20 Years In The Stock Market Will “Break A Lot Of Hearts”

by | Mar 12, 2019 | Headline News | 16 comments


Jeremy Grantham, a market investor who is credited with predicting the 2000 and 2008 downturns, said that other investors should get used to more lackluster returns in the stock market in the next 20 years.  Grantham says that the poor returns will “break a lot of hearts.”

Grantham told CNBC on Thursday that after a century of handsome gains investors should get inured to lackluster returns in the stock market for the next two decades, according to Market Watch. “In the last 100 years, we’re used to delivering perhaps 6%,” but the United States’ 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. This is not great news for those who have a lot of faith in the current economy.

Over the past five years, the S&P 500 index has produced a compound annual growth rate of 8.1%, the Dow Jones Industrial Average has boasted a CAGR of 9.1%, while the Nasdaq Composite Index has registered a compound return of 11.4% over the same period, according to FactSet data. –Market Watch

In spite of the stock market’s plunge in the latter portion of 2018, Grantham believes his prediction is correct because he views the market as still pricey. “This is not incredibly painful, but it’s going to break a lot of hearts when we’re right,” Grantham was quoted as saying.

Grantham has been predicting a meltdown in stocks since last year. He has even said that not even the recent go-slow reversal by the Federal Reserve on rate increases and the European Central Bank’s decision to roll out a fresh batch of bank stimulus will push stocks significantly higher. “You can’t get blood out of a stone,” he told the network. Other economists have warned that when the economy finally collapses this next time, the central bankers and the government will be unable to save anyone.

This will be limping along; three steps down, two steps back. It’s not a typical experience,” Grantham, who is famous for calling the last two major bubbles in the market, told CNBC’s Wilfred Frost on Thursday. “I was really hoping there would be a magnificent bubble ending to this, as there had been to the three great recent experiences,” he said. “It doesn’t look like it will and, therefore, you’re going to have a decline of a different nature.”

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    1. GrayEagle48

      I picked up this interesting little tidbit of information on a radio show called Phil’s gang.
      “Of the fortune 500 companies ten are pharmaceutical companies, those ten companies
      make more profit than all the other four hundred ninety companies combined”, no
      wonder the Lord calls them “thy merchants were the great men of the earth.”
      Click here

    2. Anonymous

      I was hoping he would state his net worth and financial investment positions so I would know whether or not to pay attention to him.

      I prefer to listen to rich investors who are still getting richer to see what they are saying and doing than to someone that I know nothing about.

      • Stuart

        Jeremy Grantham is one of the great investors of all time. Period. He absolutely knows what he is talking about. Far more than idiots like Jim Cramer. If you don’t know him or his work you truly have no place in the stock market. You are nothing but red meat.

        I personally disagree that we won’t see a “melt up” in the market but that is a minor quibble. If you believe that the market is mostly downside from here then Commodities is where you should be.

        • Genius

          Silver dot com has 10oz. sunshine mint bars with anti counterfeit feature for .69 over spot. Stack em up! If I had some extra real estate I would sell it and buy silver with the cash.

          • Genius

            And if you have a bunch of cash then advertise that you buy gold and silver coins. I know a guy that did and he got a bunch of old morgans and 1 of them turned out very rare and in MS condition. He auctioned it off for 250,000 bux! You could score big too if yer lucky!

        • dixiebrick


    3. Bert

      The government is going to print to infinity,

      therefore, since all of the newly created debt money goes through Wall Street +multiple times+ [each dollar ends up in ten peoples pockets as it gets circulated] the newly and endlessly created debt money shows up on the bottom lines of the corporations, the stock market will follow the debt, up, up, up! Debt $100T, DOW 100k, S&P 20,000.

      You ‘Bezos’ think that when the debt exceeds $100 trillion that the ‘stuck mocket’ will be collapsing? BAHAHAHAHAHAHA

      This shit story of a stock collapse is pure fiction, unless the truckers stop trucking for any reason, then society collapses, and all the food vaults you have will run out anyway, you’ll end up living an additional year, unless you get shot first or die of a disease.

      The money printing is the only thing keeping the balloon in the air, and they ain’t going to stop inventing new ways to go further into debt.

      • Stuart

        Yes, they will print money until it doesn’t work anymore.
        The Bond Market will decide when that is.
        When the bond market makes it’s decision, the stock market will follow.
        Take it to the bank.

    4. Kevin2

      Technology is a chief driver of productivity; productivity is the chief driver of profits. What is unique and potentially destabilizing is it’s modern accelerated rate. Even good things can be administered in ways that are not good.

    5. Honeypot

      Robots are butchering meat. If I was going to invest in stocks, I’ld bet on robots butchering beef. Whereas robots performing surgery may wind up with law suits, no one’s going to sue a butchering robot. As for biotech, it’s probably peaked. It’s been a great ride for investors but once at the top, it isn’t easy to hold that position. The one good thing that has come out of a century of war is that we have great tools for trauma care.


    6. Joe

      Opt out. Hard assets. Get some and you will have a leg up when fiat is worthless.
      We are almost at that point now.

    7. Gestor

      Put it out there when bitcoin was somewhere around $76….they scoffed.
      There’s money to be made but timing is paramount.

      • Stuart

        Some idiots will still be scoffing when bitcoin hits zero – and it will.
        How many of the geniuses bragging on this very site sold when bitcoin went over $16,000?
        How many COULD?
        None – which is why they aren’t here posting anymore.

    8. JJJ

      Have your wealth in hard assets….or prepare to get wiped out.!!!!

    9. TheGuy

      Lovely, now there’s literally NO way to beat inflation (gold typically paces it…)

      Get ready to bleed out slowly.

    10. Jim

      The market has always broke a lot of hearts, why should it stop now?

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