British Investor Predicts Stock Market Payback in the US in 2024: What Awaits Investors?
In 2024, according to the forecast of renowned British investor Jeremy Grantham, the US stock market may face a downturn. He predicts a market crash of 50%, believing that one of the biggest bubbles in market history has formed.
Jeremy Grantham, a British investor, is known for his successful investment approach and philanthropic initiatives. He is the founder and chief executive officer of investment firm GMO, which manages billions of dollars in assets. Grantham has established himself as one of the most successful investors of his generation, thanks to his analytical methodology and ability to predict market trends. He is considered one of the pioneers of the “value” investment strategy, which involves seeking undervalued assets and investing in them on a long-term basis.
One key point of his forecast is the decline of the S&P 500 index to the level of 2130 points. As of Monday, October 9, 2023, the S&P 500 index is at the level of 4300 points. Grantham also highlights the American Russell 2000 index, which includes many highly indebted zombie companies. Rising interest rates could have a negative impact on such companies.
According to the forecast of British investor Jeremy Grantham, the US stock market could face a crash in 2024, with the S&P 500 index potentially declining by 50%. He points to the presence of a super bubble in the stock market, real estate, and commodities market that has not yet burst, but the risk of it happening has become higher. Grantham also notes that the real estate sector is vulnerable, and the overall stock market could see a 50% decline. He cites several factors, including consumer savings depletion, worsening economic indicators and corporate lending conditions, as well as the prospect of burdensome interest payments on US government debt. However, investor forecasts are always associated with a certain level of uncertainty, and it should be remembered that markets can develop differently than Grantham expects.
Investments in assets, according to the investor, appear risky. He also points out potential problems for the stock market if the “Fabulous Seven” companies lose investor interest. This group includes Apple, Amazon, Alphabet, Meta, Microsoft, NVIDIA, and Tesla.
Not only the stock market, but also the real estate sector is not a safe place for investors, according to Grantham. He believes that real estate prices may decline due to rising interest rates, and the sector itself is overvalued in many countries around the world.
The British investor also predicts that the US economy may soon enter a recession for several reasons. Consumers have almost no savings left, and leading economic indicators are deteriorating. Corporate lending conditions are also becoming stricter.
In light of these forecasts, investors should exercise caution and reconsider their investment strategies. The possible downturn in the stock and real estate markets could lead to capital loss and negatively impact their portfolios. To minimize risks, attention should be paid to asset diversification and alternative investment opportunities.