Reinvesting When Terrified

GMO

Jeremy Grantham

Article

1 Pages

The authors examine how investors can avoid paralysis after a market collapse by establishing a disciplined reinvestment plan. They argue that value-focused investors may act early, but staged purchases based on falling prices can reduce timing risk and prevent excessive cash holdings from missing a sharp recovery.

Key Takeaways

Plan Before Panic: GMO made 1 large reinvestment move in October, moving its equity position halfway between minimum and neutral.
Valuations Improved: GMO estimated the S&P 500’s fair value at 900, approximately 30% above its prevailing price.
Recoveries Move Quickly: The S&P rallied 105% in 6 months during 1933, while UK equities gained 148% in 5 months during 1974.
VIEW FULL REPORT

Join our newsletter to have all of this content + Exclusive Newsletter Bonus Content delivered to your inbox every week

Related Content

Markets
AI capex, required revenues, and what’s priced in the AI trade
Oct 2026
Markets
October Update: Fundamentals in Focus
Oct 2026
International Markets
The Deep-Value Opportunity in South Korea
Oct 2026

The information contained in this communication is of a general nature for informational purposes only, and does not constitute financial, investment, tax or legal advice. The information contained within this communication reflects the opinions of those referenced herein, and do not reflect the opinions of The Idea Farm, L.P. and its affiliates. Such opinions expressed herein are as of the date of production and are subject to change at any time without notice due to various factors, including changing market conditions or tax laws. Where data or information prepared by third parties is presented, no representation, warranty, or undertaking, expressed or implied, is given to the accuracy or completeness of such information by The Idea Farm, L.P. or any other person. While such sources are believed to be reliable, The Idea Farm, L.P. does not assume any responsibility for the accuracy or completeness of such information and does not undertake any obligation to update the information contained herein as of any future date. Any links to third party websites are offered only for use at your own discretion. The Idea Farm L.P., and its affiliates, are separate and unaffiliated from any third parties listed herein and are not responsible for their products, services, policies or the content of their website. All investments are subject to varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy or product referenced directly or indirectly in this communication will be profitable, perform equally to any corresponding indicated historical performance level(s), or be suitable for your portfolio. Past performance is not an indicator of future results.

Scroll to Top