What You Need to Know
- Fair value for the S&P 500 could be about 3,000 a year from now, and there's nothing stopping it from slipping below that, he tells the AP.
- The bursting of the "superbubble" is hardest for mid-career people, Grantham said.
- Young investors with long time horizons should benefit from stock pullbacks, he notes.
Despite this year’s major stock market slide, investor Jeremy Grantham sees room for further pullback.
Grantham, co-founder and chief investment strategist of Grantham, Mayo, van Otterloo & Co., told The Associated Press recently that fair value for the S&P 500 a year from now would be “pretty close to 3,000” — a roughly 24% decline from its value in Friday afternoon trading.
And there’s nothing to stop the market from slipping below fair value, he said in the interview published Monday. The S&P 500 is “certainly entitled to spend several months below 3,000,” Grantham told the AP.
The S&P 500 is down nearly 17% year to date, recently reaching 3,959. In mid-June it hit a 52-week low of 3,636.87.