Stock Market Crash: Marc Faber Issues Dramatic Warning to Investors

Stock Market CrashMarc Faber Says This Should Terrify Investors Everywhere

U.S. equities are now fully priced and we could be heading for a stock market crash in 2016. At least, that’s the opinion of famed market commentator Marc Faber.

Speaking in an interview with CNBC on Wednesday, the editor of the Gloom, Boom, & Doom Report said the U.S. stock market is overheated and now might be the right time to move investments abroad in regions with promising growth. (Source: “Dr Doom Marc Faber: ‘I’m a great optimist,’” CNBC, October 23, 2015.)

When asked about what he’s the gloomiest about, he mentioned the struggling corporate earnings of U.S. companies like Wal-Mart, Tesla, Yum!, IBM, and Harley Davidson and held the weakening global economy responsible for their troubles. He says central banks are resorting to quantitative easing (QE) to trigger growth. Indeed, as the ECB cut rates on Wednesday, the following day China came out with the same strategy.

“Markets go up and down as we all know. And you can’t be always sitting there and say oh stocks always go up, real estate always goes up and so forth and so on. You could have zero interest rates and stocks go down as they’ve done in Japan until three years ago. So, even at these very low interest rates, something can happen that could dampen the enthusiasm of equities and I’m just a believer that the U.S. equities are now fully priced. ”

Faber is of the view that the Indochina region is expected to grow by over six percent and might be the right place to invest in right now. When asked how he’d like to invest in this region, he said both in the equity markets and in real estate.

“It’s a boom region, Indochina. It includes Vietnam, Cambodia, Laos, Thailand–which is not booming right now–but Myanmar also and in the north Yunnan province of China, and in the south Malaysia, Singapore. This region can grow at six percent to eight percent per annum, provided there’s peace. Cambodian exports were up 20% this year. Vietnamese exports are up approximately 10% this year. So relative to the rest of the world, this is a boom region.”

Faber went on to say that gold has become the next best alternative for investment, after equities. Equity investment, according to him, has become overly risky this year because of unpredictable and volatile price oscillations.

“I added to my gold position about two months ago and I bought some gold related equities. But other than that I’ve done very little because I believe that in this extreme volatility when markets suddenly drop 10%, individual stocks drop 10% or 20% in one day, it’s a very difficult environment to make a lot of money unless you take huge risks.”

You can watch the full interview here.

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