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Being too bearish in this pandemic-stricken US stock market can be costly.
Apparently that’s the lesson Jeremy Grantham, co-founder and chief investment strategist at Boston-based fund manager Grantham, Mayo, Van Otterloo & Co., learned this year as his fund saw clients withdraw. billions of dollars from its flagship fund. it has been a long way from the stock market at large.
GMOs track the S&P 500 Index by 14 percentage points, according to a Bloomberg News report on Tuesday. The outlet reported that customers have withdrawn $ 2.2 billion from the fund so far in 2020.
Gratham painted a very bleak picture of the investment landscape in the United States, suggesting that the rampant trading of unemployed investors and speculative fervor reflects a market that is perhaps the most bubbling he has seen in the past. his rich career.
However, markets did not quite conform to its bleak outlook, rebounding at historic rates in some segments.
The S&P 500 SPX index,
is up 12.2% so far this year, the Dow DJIA,
gained nearly 5% over the period and the Nasdaq Composite Index COMP,
has climbed just under 35% since the start of the year, with all three benchmarks trading at or near record highs.
And even unfortunate, small cap stocks, which have been hit particularly hard by the COVID-19 health crisis, have mounted a decisive rebound, up nearly 10% year-on-year and trading in record territory.
In June, one of GMO’s top investment agents, Ben Inker, told investors it was time to sell shares, in a letter to a client, cited by Bloomberg. Inker suggested to Bloomberg that investing is not an easy game.
“The cruel logic of being a value manager is that just when your opportunities are at their best, your credibility with clients is at its lowest,” he said.
A call from MarketWatch to the Grantham office in Boston was not immediately returned.
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