Grantham Says Assets ‘Brutally Overpriced’ on Fed Policy – Bloomberg 02-26-13

Salient to Investors:

Jeremy Grantham at Grantham Mayo Van Otterloo said:

All global asset prices are too high because of Federal expansive monetary policy.
US companies, other than quality stocks with stable earnings and low debt, and most global growth equities, are brutally overpriced. US large-caps, excluding quality stocks, will lose 0.8 percent per year for the next 7 years, adjusted for inflation.
Emerging-market stocks, Japanese stocks and European stocks are only a little expensive.
Bernanke and Greenspan have created asset bubbles by holding interest rates at artificially low levels.
The Fed is trying to badger people into making riskier investments in order to push up equity prices – a typical strategy of the Greenspan-Bernanke era. This can drive up asset prices for a time, but will ultimately result in exciting crashes.
Avoid fixed income – US bonds will lose 1.6 percent annually.

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