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Howard Marks on Stocks: 'This Is Not the Time to Take on More Risk'


By    |   Tuesday, 30 January 2018 02:43 PM

Economic guru Howard Marks warns savvy investors to be very careful about wading into the volatile stock market.

"We are living in a low-return world, characterized by significant uncertainty," Marks told CNBC.

"This is not the time to take on more risk. Things have been going awful well for almost 10 years. That's not the time to turn up the wick," the Oaktree Capital co-chairman said.

"Most valuation parameters are either the richest ever … or among the highest in history," Marks wrote in a note to clients Jan. 23. "In the past, levels like these were followed by downturns. Thus a decision to invest today has to rely on the belief that 'it's different this time,'" he said.

"Is [the market] a bargain? Unlikely," he said.

Meeks isn't alone in his apprehension.

To be sure, rising bond yields and a sell-off in healthcare shares sent the U.S. stock market sliding on Tuesday, with the Dow Jones Industrial Average’s 400-point tumble its steepest in eight months.

“Investors are getting a bit worried about inflation which has led some people to believe that the Fed might be more aggressive when it comes to raising rates,” Robert Pavlik, chief investment strategist at SlateStone Wealth, told Reuters.

For his part, economic guru Jeff Gundlach is warning investors not to misjudge the “dangerous cocktail” of rising interest rates and a weakening dollar.

In a tweet on Monday, the chief investment officer at Los Angeles-based DoubleLine Capital LP said he saw “mania sentiment everywhere” and advised traders to “risk manage mindfully.”

The billionaire bond guru is part of a growing chorus of market players warning that a decade of central bank stimulus has pushed asset prices to unsustainable levels.

Goldman Sachs Group Inc. warned this month that global stocks and U.S. Treasuries are in the throes of the most “extreme” start to the year ever as bullish sentiment engulfs markets.

This current volatile market-trading environment is exactly why smart investors should own some gold, Newsmax Finance Insider Andrew Packer advised.

"Owning something like gold to protect you during periods of market fear can be useful," Packer recently wrote.

"But that usefulness is limited, as markets tend to spend most of their time rallying. That’s why you should use any fear-based pullback as an opportunity to buy other assets on the cheap as well," he said.

(Newsmax wire services contributed to this report).

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Economic guru Howard Marks warns savvy investors to be very careful about wading into the volatile stock market.
howard marks, stocks, risk, investors
Tuesday, 30 January 2018 02:43 PM
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