Jeremy Grantham Warns of Potential Stock Market Crash in 2023
By Legendary investor Jeremy Grantham has warned investors of the potential for a big stock market crash in his 2023 outlook letter, published on Tuesday.[0] Grantham predicts that the S&P 500 could drop by 20% by the end of 2023, and up to 40% from the market’s last peak in January 2022. However, in the worst-case scenario, the market could fall a stomach-turning 50% from its peak.[1]
Grantham believes that while the extreme froth has been wiped off the market, valuations are still nowhere near their long-term averages.[2] He puts the odds of the market reaching his calculated trendline value of 3200 at 3 to 1.[3]
These predictions are backed up by research from the University of Vaasa, which suggests an “armageddon” financial crisis could occur in the next few decades. The research claims the US stock market could face collapse by 2050, and is sounding the alarm over an impending financial crisis.[4]
While it is impossible to know for sure when and if a stock market crash may occur, investors should be mindful of the potential risks and be prepared for a potential decline in the near future. Timing a potential stock market decline will be essential for investors to protect their investments and minimize their losses.
0. “Wall Street prophet Jeremy Grantham predicts another stock market crash” The Times, 30 Jan. 2023, https://www.thetimes.co.uk/article/wall-street-prophet-jeremy-grantham-predicts-another-stock-market-crash-fk0v00j7g
1. “‘Back to the meat grinder’: Jeremy Grantham warns that stocks could plunge a ‘stomach-churning 50%’ from here — he's using these 3 shockproof stocks for protection” Yahoo! Voices, 30 Jan. 2023, https://www.yahoo.com/now/back-meat-grinder-jeremy-grantham-160000597.html
2. “Jeremy Grantham warns of a massive stock market crash in 2023 outlook” Markets Insider, 29 Jan. 2023, https://markets.businessinsider.com/news/stocks/jeremy-grantham-stock-market-crash-warning-2023-bubble-outlook-2023-1
3. “Legendary investor Jeremy Grantham warns stocks could drop another 50% this year—but he doesn’t say to stay away from markets entirely” Yahoo! Voices, 30 Jan. 2023, https://www.yahoo.com/now/legendary-investor-jeremy-grantham-warns-173553990.html
4. “An economics researcher is warning that the next few decades could bring a massive stock market collapse” msnNOW, 4 Feb. 2023, https://www.msn.com/en-us/money/savingandinvesting/an-economics-researcher-is-warning-that-the-next-few-decades-could-bring-a-massive-stock-market-collapse/ar-AA176z05?li=BBnb7Kz
