The legendary value of the investor Jeremy Granteham It appears that the alert to the current situation of US financial markets says that a 50 % decrease in the stock market is possible.
What do you know: In a conversation interview With Wealtetrack, Grantham referred to three factors that create distortion in the stock market: the continuous effects of the huge Covid-19 incentive, the rapid rise in artificial intelligence and continuous tariff wars.
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Covid-19 response said the Economy injection of the economy and feeds speculative abuses between retailers.
Meanwhile, the artificial intelligence boom pushed a handful of giant technology companies-the so-called wonderful seven-to the huge gains and perverted market dynamics.
The trade war adds another layer of inability to predict, leaving economists and investors both struggling to predict economic results.
Grantham said that the traditional measures used to measure the market, such as the total market value against GDP, indicate a large amount of amounts that can be subject to a significant decrease.
“The market can decrease 50 % easily and be within its historical borders. This will not be a huge low,” said Grantham.
Experts’ ideas: Given the risk of correction, Grantham advised investors to convert the focus towards valuable shares and non -American shares. He also suggested giving priority to high -quality companies with low debt and strong profit margin and climate -related sectors and resources as being dense of their value.
The final result of Grantham: Investors must prepare for fluctuations in the currently exaggerated market and the exact timing of the market correction remains impossible to predict.
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