Massive Market Crash in the Fall
The editor of the Gloom, Boom, and Doom Report got fired up in an interview with Fox Business News. After another day of lows in the market, and record lows in U.S Treasuries, Marc Faber expressed his concern with the stock market, gold, and more money printing.
Here are some quotes from his interview found below:
“We could easily drop below 1000 on the S&P.”
“If you print as has been printed in the U.S. over the last 2, 5, 10, 20 years, it's very beneficial for corporate profits because it flows mostly into the comforts of companies but eventually the money printing stops and corporate profits don't grow anymore.”
“I like physical gold but I think we are still in a correctional period but like the stock market, I think gold has been oversold.”
Since the record high in gold price hit in August at 1,889.70, prices have slowly dipped, especially over the past few months. Investors looking to cash in on the gold market could jump in now and wait out the prices. Faber points out that gold is not in a bear market but rather, is “still in a correction phase.”
“Individual investors should gradually accumulate gold,” Faber explained. “Hold some cash, hold some precious metals, hold some equities, and hold some real estate. If one asset class or the other declines substantially move money into that asset class.”
It sounds much easier said than done. But with the recent spike in gold prices coming off of the U.S. government's lousy jobs reports, the correction phase looks to be the time to get on board.
Many felt – and still feel – that if the Fed moves forward with quantitative easing that the gold prices will most definitely rise against the dropping price of the dollar. We have seen it before and it looks to happen again.
Even the big investment banks are still riding the precious metal train amid all of this uncertainty. In one Goldman Sachs' analyst's research note to Reuters, they explained, “We still prefer gold despite an extended period of profit taking in 4Q11 and renewed volatility in 1Q12.”
Don't let the price correction of gold impact your long term outlook on your investments. Follow Faber and Goldmans' lead and gradually add to your gold portfolio.