Investment advice from Jeremy Grantham, GMO

In today’s article I will share a piece where Jeremy Grantham from GMO gives advice to investors.

Who is Jeremy Grantham?

Jeremy Grantham along with Richard Mayo and Eyk Van Otterloo founded Grantham, Mayo, Van Otterloo & Co. more popularly known as GMO. GMO is famous for giving seven year forecasts for different asset classes including US equity, US debt, emerging market equities and emerging market debt among others. They maintain that they are comfortable taking a patient, long-term view and allocate money to asset classes according to the forecasts.

Few investors think seven years ahead from now.

They are an asset management powerhouse with around $110 billion under management. How big this number is will be appreciated when you consider that India’s foreign reserves are around $279 billion as of 19 July 2013.

He is known for his witty and elaborate letters with investors. Sample this one.

In this letter which he wrote last year, he has addressed ten points to investors. You might have read some in isolation before. What we need to do is strive to apply them rigorously, especially, during the most demanding and challenging market conditions.

I think most of us have been guilty of overlooking these points at some  or the other. I can confidently say that I have. I also must say that I strive to improve and this is a continuous process.

Here is Jeremy Grantham’s advice to investors.

 

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