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Marc Faber Suggests Investors Reduce Equity Exposure

April 10, 2012 | About:

Marc Faber, editor of the Gloom Boom Doom Report, has given a few interviews in the last week where he has recommended that investors should "reduce their exposure to equities." Faber sees an opportunity to buy stocks cheaper in the near future.

"Where investors were overly negative last year, they are now overly optimistic about the prospects for the U.S. economy," Faber says, pointing to the ''huge bull run'' we have had since 2009. "I think the (stock) market is very overbought."

Faber is still bullish on gold despite the fact that gold is off almost 20% from its highs last fall. Faber sees no rush for investors to dive into gold because he feels that gold is "still in correction phase." The long-term outlook for gold is positive because of the outlook for continued money printing by the Fed and other central banks around the world.

Previously, Faber was bullish on emerging markets such as India. However, Faber's optimism is far more subdued in April 2012. Emerging markets were "very oversold last September and since then have become overbought."

Faber recommends that investors hedge their portfolio and "hold some cash, hold some precious metals, hold some equities and hold some real estate." Basically, this strategy ensures that "if one asset class or the other declines substantially, move money into that asset class."

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