GMO: Cheapest Stocks and Global Assets Offer Best Returns in Decades

Invest in the cheapest 20% of large-cap stocks, which offer a 7.6% real return - the best opportunity in 35 years according to GMO.

Focus on non-US stocks, which benefit from attractive valuations and cheap global currencies. GMO forecasts 12.6% returns for global deep value equities.

US large equities overall have poor forward returns (-1.1%), while US large- and small-cap value offer around 3%.

Cheap currencies boost returns for international stocks either through currency appreciation or competitive advantages.

GMO also sees opportunities in bonds, credit, and alternative assets. A diversified portfolio could beat typical stock-bond mixes by over 5%.