It may qualify as market noise, but I admit to looking at the GMO 7-Year Asset Class Forecasts whenever they come out once a quarter (or more often now?). You can read it and other market commentary from Jeremy Grantham (whose opinions I respect) for free by registering on their website. The most recent one was released a few days ago:
Source: GMO.com (click to enlarge)
Most of the time, I just like looking at these forecasts because they reinforce the idea that I should rebalance and buy whatever has been underperforming lately. Right now, that’s Emerging Market stocks. I also see some logic in buying some Timber REITs as part of my REIT exposure, as I don’t believe Timber REITs are included in the Vanguard REIT ETF (VNQ). Invest in tree farms!
I don’t like the “High Quality US Stocks” category because it doesn’t explicitly state what those are. How else will we know if the prediction was right?
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Grantham has always had a fetish for timber and believes that asset class will have outlandish returns. I would just take that into account whenever you look at these projections, which otherwise I find tremendously useful. Also, timber REITs aren’t going to get you the same results as investing in a TIMO, which aren’t generally accessible to retail investors, so that bar is one that most individual investors should probably ignore.
@Andy – Yes, I’ve read that about Timber as well, but it seems like buying some Timber would still get some of that benefit. I like how Weyerhauser is set up now as an REIT. But as a practical matter I doubt it would make much different as a small % of my portfolio anyway, so I agree that I should probably not worry about it.
Curious as to how you would plan to invest in them?
Specific fund?
Taxable account?
Would you account for this (assuming taxable acct & unrelated to retirement funds) asset allocation in your entire portfolio & move money from somewhere else or would this be solely for new money? (Mad money)
Just curious.
@Red – Timber? I don’t know, there are Timber ETFs. Many people invest in Plum Creek (PCL)
“Plum Creek is one of the largest landowners in the nation and the most geographically diverse, with approximately 6.4 million acres of timberlands in major timber producing regions of the United States.”
I like Weyerhauser but for more personal experience reasons. I would decrease my generic REIT holdings and hold Timber REITs in place of the decrease, but only a small fraction. Really, I don’t know if it is worth the bother, it’s just one of those things that I like to ponder about.