Tags: Faber | gold | stocks | mining

Marc Faber: Investors Should 'Be Diversified'

By    |   Wednesday, 05 June 2013 08:04 AM

Troubles around the world have reached a boiling point, and the best way to mitigate these risks is to diversify your investments, according to investment contrarian Marc Faber.

Faber, publisher of the Gloom, Boom & Doom Report, sees a global minefield nearly everywhere he seeks to step.

"The danger is that the whole financial system could blow up due to the huge amount of derivatives still outstanding," he said in an interview with The Gold Report.

Video:
Economist Predicts 'Unthinkable' for 2013

"Once again, excessive speculation is being fueled by artificially low interest rates, and asset bubbles existing everywhere."

Faber said that due to a thicket of uncertainties, he is hedging his bets by spreading his money around widely.

"My asset allocation consists of 25 percent equities, 25 percent in gold, 25 percent in bonds and cash and 25 percent in real estate."

He told The Gold Report that many junior gold mining stocks have been hit hard, in part because they have little cash flow and bleed cash to keep up exploration. That means they are dependent on a new increase in gold prices.

"If the gold price goes up 20 percent, many mining companies could double, Each company has a different structure, but at the current gold price, a lot of projects are simply not economic at the bottom line."

In the meantime, Faber speculated some nations might begin to impose draconian taxes on the wealthy in order to maintain the support of a suffering majority.

"Nobody has the faintest clue about what the world will look like in five to 10 years," he noted, adding that the Middle East is "complete mess" and China's new premier, Li Keqiang, is "anti-Western."

"So I would be diversified, as I said, some money in equities, some money in cash and bonds — I only have corporate bonds, not government bonds — some money in real estate and some money in gold and silver."

Jeff Clark, a senior precious metals analyst at The Casey Report, predicted gold may resume its upward march for a number of reasons, including unsustainable government deficits, continuing purchases of gold by central banks, and an overlooked rush by physical gold buyers as evidenced by volume on the Shanghai Gold Exchange and elsewhere.

"The bottom line for us is that while the [Federal Reserve's] efforts may seem to have some positive effects on certain aspects of the economy, there is no free lunch. Concluding that there will be no negative fallout from decades of government profligacy around the world is short-sighted."

Video: Economist Predicts 'Unthinkable' for 2013

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
InvestingAnalysis
Troubles around the world have reached a boiling point, and the best way to mitigate these risks is to diversify your investments, according to investment contrarian Marc Faber.
Faber,gold,stocks,mining
428
2013-04-05
Wednesday, 05 June 2013 08:04 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved