Jeremy Grantham Warns 2013 Will Be A Dangerous Year For Stocks
“I think next year will be a dangerous year. It is the first year of a presidential cycle. I have always paid close attention to it as a reliable indicator.
It is the time when the Fed and the U.S. government typically try to get things more in order.” Grantham continues:
“History is quite clear. There has been, on average, no money made in year one and two after a Presidential election going back to 1932, after you adjust for inflation.
All the money is made in year three with an adequate return in year four. In general they stimulate in year 3 to create a wealth effect in year four and it works and everyone is happy.
You can’t do that every year. At some point you have to address a budget that is way out of balance”
Grantham believes that investors’ almost universal belief that rates will remain low is another disturbing phenomenon. In other words now that everyone is convinced interest rates will remain low, they probably won’t.
http://www.forbes.com/sites/schifrin/20 ... or-stocks/