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Grantham: No Bubble, Yet

The GMO chief strategist advises prudence but says the market may well move even higher from here.

The market is creeping toward bubble-land but isn't there quite yet, said GMO chief investment strategist Jeremy Grantham during his keynote at the 2015 Morningstar Investment Conference. He warned investors to pay careful attention as valuation metrics begin to approach a "2 sigma event," or 2 standard deviations away from the norm.

"Every 2-sigma event is followed by an equal and offsetting 2-sigma reversion," he said, adding that the pattern occurred in 28 out of 28 of the major bubbles GMO has studied throughout history. "And they all went back half a year quicker than they went up," he added.