As the European markets open high after France and Australia and seven other Eurozone nations downgraded by S&P on Friday, Marc Faber, the legendary investor and the publisher of “Gloom, Boom & Doom Report”, talked with Fox Business about the European downgraded event on telephone.
“In general I would say the downgrades were already discounted by the bond market in Europe. When the news came out, it has no impact. It’s like when a war breaks out. It’s prior to the war that the market has already discounted the war and went down strongly.” said Faber, “On the war news, the market shows up.”
In term of investment strategy, Faber explained that eventually investors want to be positioned more in equities than in government bonds, and own some precious metal as well. “I like it (gold), but I think the correction is not over yet.” said Faber, “I think we have a big correction from the peak on September 6 when gold is $1,921. We went down $1,522 at the end of December. Now we rebounded over $1,600. I think we can have another lag down.”
Faber also suggested investors to invest in every government bond a little bit, but not at the same time.