Jeremy Grantham, the co-founder of investment firm GMO, believes that we are in the middle of a ‘superbubble’ that spans across major asset classes, such as bonds, stocks, real estate, and commodities. Grantham warns that this superbubble could culminate in $35 trillion in losses of value in the United States when pessimism returns to the markets. Grantham suggests that investors should look to avoid overvalued U.S. equities and the red-hot real estate market. Instead, investors can add value stocks from of companies based in emerging countries.
The current stock market correction may be an early indication of the impending superbubble burst; the benchmark indexes witnessed their worst week since the onset of the pandemic in March 2020.
