Jeremy Grantham: S&P 500 will rally to 2,250, then stock-market bubble will pop
The bull market probably won’t end for a year or two, not before the S&P 500 rallies past the 2,250 level, says Jeremy Grantham in his latest quarterly letter.
This year likely will be tough for stock investors until October, adds Grantham, who is the founder of Boston-based money manager GMO. He has a reputation for sniffing out market bubbles early.
“But after October 1, the market is likely to be strong,” especially through April 2015, he writes. Perhaps by the time of the November 2016 election, the S&P 500 will have rallied past 2,250, maybe by a decent margin, according to Grantham.
But then “around the election or soon after, the market bubble will burst, as bubbles always do,” Grantham writes. The stock market “will revert to its trend value, around half of its peak or worse, depending on what new ammunition the Fed can dig up.”
The S&P 500 SPX -0.14% was at 1,881 on Friday at last check, so a rally to 2,250 would represent an advance of about 20%.
Go here to read Grantham’s entire quarterly letter, which says value investors “will win in the end” even in “our current congenitally overstimulated world.” The two-year outlook given above starts on page 11 of the PDF, under the subtitle “Best Guesses for the Next Two Years.” |
发表于 2014-5-2 22:00
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