Marc Faber’s asset allocation process
Marc Faber, editor and publisher of the Gloom, Boom & Doom Report, is worried about the present market condition. He’s not very optimistic about the market (SPY) (QQQ). He’s also more concerned about global (ACWI) economic growth. The rising debt level, credit growth, and central banks’ easy monetary policies are creating huge concerns for the global economy.
If the global concern increases, then investors may need to diversify their portfolios into various asset classes and not concentrate on a single asset class. So if one asset class is affected due to uncertainties, others could make up for that.
Faber said he has “twenty-five percent in real estate; my real estate is mostly in Asia. Twenty-five percent in equities; I have mostly Asian equities. Then I have some precious metal and gold shares.” Earlier, we saw that he advised investors to allocate their portfolios with equal percentages in various asset classes like the equity market, the bond market (BND), real estate, and precious metals (GLD) (RING).
If the equity market shows some turmoil, then safe-haven assets may provide strong returns. Faber’s advice to investors is to be careful about their portfolio allocations in the present market scenario. He also said that he’s optimistic on Asian equities and the European equities and believes that Europe has a better value than the United States.
You may also be interested in reading How the S&P 500 Index’s Major Sectors Performed in July.