Marc Faber, a veteran market commentator known as “Dr. Doom,” has issued a stark warning to Indian retail investors. He advised them to exit equities at the first sign of a market rebound.
Faber earned his moniker after predicting the 1987 stock market crash. Since the 1970s, he has been recognized for his bearish forecasts. In recent remarks, Faber highlighted retail investors’ risks amid potential market reversals.
He emphasized the importance of caution in the current environment. “If the market rebounds, then get out,” Faber said on Wednesday in a televised interview when asked what his advice would be for Indian retail investors. He warned that bear markets globally could last for several years.
The 79-year-old analyst suggested that holding precious metals could be a viable alternative for Indian investors. He said the value of the rupee “will decline against the price of gold, silver, and platinum.” Faber claimed retail investors fueled the rally in equity markets in the US and India last year.
Caution urged for retail investors
They injected their savings into stocks without much deliberation. “Last summer, retail investors participated heavily in the US market.
The same happened in India… Many of these investors have no clue,” he said. According to Faber, speculative trading funneled globally towards AI chipmaker Nvidia, electric vehicle giant Tesla, and Bitcoin.
“Now, things are reversing,” he added, pointing to the slump in the two stocks over the past few months. Retail investors have suffered colossal losses in the last two months,” Faber said. He added that Indian investors mirrored such losses over the same period.
Faber does not foresee a recovery in major equity markets over the next few years. He noted the US market is the “biggest bubble in history” compared to the real economy. As investors navigate these turbulent times, Faber’s warnings serve as a reminder of the importance of vigilance and prudence in investment strategies.
His outlook echoes his long-standing skepticism about market stability, suggesting that the global markets might be in a bubble.
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