Are investors in purgatory or hell? Meaning, will this overpriced U.S. stock market revert to its long-term average valuation, or have stocks settled at a permanently higher plateau?
“Permanently higher plateau” certainly sounds preferable. Who doesn’t want stocks to maintain higher valuations? Grantham, Mayo, van Oterloo, for one. In its most recent quarterly letter to clients, the respected Boston-based asset manager points out that higher share valuations mean lower future returns.
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