10 views on the market from Jeremy Grantham
A lower-growth world could be less volatile
Mr. Grantham writes of his “trepidation” with bringing this issue up, but notes that “it does seem possible that in a world with both lower growth and a lower risk-free rate that the risk premium might also drop a little. A lower growth world might plausibly be less volatile because managing a world where the apparent growth is 1.5% (and real growth is 0.9%) is likely to be easier to stabilize than one (as from 1870 to 1995) appearing to grow at 3.4% but actually growing at 3.6%, almost four times higher.
Source: GMO's 4Q letter