Jeremy Grantham: Avoid government bonds

British-born investment guru Jeremy Grantham believes most global assets are "brutally overpriced". So, what should you buy?

Most global assets are now "brutally overpriced", says Jeremy Grantham in his latest quarterly letter, as investors are bullied by the Federal Reserve's loose monetary policy into taking more risk. This has been the pattern in markets since 1994, says Grantham.

The successive regimes of Alan Greenspan and Ben Bernanke have cut interest rates "to badger us into riskier investments in order to push up equity prices and grab a short-term wealth effect". Despite his doubts about the efficacy of the approach, Grantham acknowledges that it creates opportunities for investors.

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