This morning, the Wall Street Journal’s Brett Arends published a piece in which he hypothesized:

In the investment world, America’s importance may be shrinking.

Analyzing what this might mean for investors, he mentioned well-known money manager Jeremy Grantham, chief investment analyst for the global investment firm he founded, Grantham, Mayo, Van Otterloo & Co. (GMO). Arends wrote:

First, do not rush out and pour your money into emerging markets and Europe.

Overseas markets have risen so far so quickly that they look unappealing at current levels. That’s particularly true of emerging markets. Chinese and Indian equities now trade for an average of about three times book or net asset value, according to FactSet. That’s higher than at any time recently except the 2006-7 bubble.

Jeremy Grantham’s fund firm GMO, an emerging-market bull earlier this decade, now takes a different stance: The firm’s latest medium-term forecasts rank the attractiveness of emerging markets somewhere below U.S. high-quality and developed international markets.

Source:

“Are Investors Ready for a Post-American World?”
Brett Arends
Wall Street Journal, October 22, 2009

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