Grantham: Invest in Quality Stocks as Protection in Coming Market Decline

Jeremy Grantham predicts a 50% stock market decline and advises investing in high-quality stocks, which he calls a "free lunch."

History shows high-quality stocks outperform the overall market during downturns and over the long-term, with lower volatility.

MSCI data since the 1970s confirms quality stocks beat the market by about 2 percentage points annually in the U.S., Europe, and Japan.

$100k invested in quality stocks in 1994 would be worth $2.7 million today in the U.S., versus $1.6 million in the overall market.

Grantham may be right that quality stocks are a good bet now, as funds like IQLT and QUAL have low fees and could fall less in a downturn.