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> The chart represents local, real return forecasts for several asset classes and not for any GMO fund or strategy. These forecasts are forward‐looking statements based upon the reasonable beliefs of GMO and are not a guarantee of future performance. Forward‐looking statements speak only as of the date they are made, and GMO assumes no duty to and does not undertake to update forward‐looking statements. Forward‐looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time. Actual results may differ materially from those anticipated in forward‐looking statements. U.S. inflation is assumed to mean revert to long‐term inflation of 2.2% over 15 years.
Unfortunately, GMO does not cover gold or precious metals equities. I would be curious as to their take.
In addition to gold, I believe US treasuries will do well.
Mike “Mish” Shedlock
Is the EM carnage over already???
My guess it is still way, way too early. Not a single real EM currency crisis yet (that spread like the Thailand crisis)
Cash, gold, Treasuries…
Maybe some pipeline companies, tobacco, coal, uranium, well run companies hurt by tariffs and a select few beaten down biotechs…
Well the easy money has probably been made and it ‘feels” like the downside is likely to outstrip any potential upside for a while for new money allocated.
Long time follower here Mish. The GMO has not been very accurate over the past few years. Here is a post from 2015…
if you followed their forecast then, alot of money would have been left on the table for 3+ years.
Yes, the so-called “doomsayers” (Hussman, Fleckenstein, Faber, Grantham, et al) have been wrong for years. Such is the power of co-ordinated, global Central Bank intervention in currency, equity and bond markets. Eventually, the bag-of-tricks will be empty and all hell will break loose. When? Who knows. As Yogi once said, “It’s hard to make predictions – especially about the future”.
They were absolutely correct. Stocks were way overvalued in 2015 (as most are still now).
The difference?
No more obama ZIRP.
No more obama QE until infinity
No more obama bailouts
Rising interest rates
The great QE unwind
The housing bubble bursting