Marc Faber: You Won’t Make Money Buying Stocks and Bonds
Marc Faber says that small investors can still make money in a volatile and uncertain market, but not by buying stocks and bonds.
“If I compare their prices to stocks and real estate, I think the precious metals is where I still find value,” said Faber. “There are exceptions to the rule that asset prices are grossly inflated. But if we were to talk about asset price inflation in general, everything will go down in value—be it bonds, equities and collectables. But precious metals will fall less than equities,” said Faber.
“It doesn’t matter whether you invest now or later, I think the return expectations are low. One will not make a lot of money by buying stocks and bonds. We also don’t know how the world will look like in five years from how—how crazy and insane the central bankers will become,” said Faber.
“Worldwide, most asset prices are grossly inflated. An asset class that became inexpensive at the end of last year was precious metals—gold, silver and platinum. While they have rallied nearly 100% since then, I think they are still reasonably attractive,” he said.
“I believe we are moving into a period where small investors have a huge opportunity to make money, as they have a window to capitalize and take advantage of market inefficiency. Index funds mostly buy large companies,” said Faber.
“As a result, it leads to undervaluation of smaller companies, and that’s where I see an opportunity for the individual investors.”
He doesn’t think the Federal Reserve will hike interest rates in September with the November presidential election looming for already jittery investors.
“The US Fed has grossly overestimated growth rates of the economy, and it appears that it the economic growth has slows down considerably. I think by December 2016, the economic statistics will be even worse. So no rate increases will happen then either,” he said.