Let me give a few more details: just behind U.S. high quality stocks, at 7.3% real on a seven-year horizon, is my long-time favorite, emerging market equities at 6.6%. This is now above our assumed 6.2% long-term equilibrium return. Additionally, my faith in an eventual decent P/E premium over developed equities exceeding 15%, perhaps by a lot, is intact. Emerging equities' fundamentals also continue to run circles around ours. EAFE equities at 4.9% are a little expensive (6% or 7%) but make a respectable filler for a global equity portfolio. Forestry remains, in my opinion, a good diversifier if times turn out well, a brilliant store of value should inflation unexpectedly run away, and a historically excellent defensive investment should the economy unravel. Otherwise, I hate it.

David Fuller's view Jeremy Grantham likes emerging equities' fundamentals but this issue mainly details his concerns for the West. One of the best essays in my opinion is number 2: "Finance Goes Rogue (But Volcker Wins a Round!)", followed by number 4: "Everything You Need to Know About Global Warming in 5 Minutes."