The prospects of recovery in major global stock markets are bleak, and the best available option for retail investors, including those in India, is to exit if there is any temporary rebound, according to Marc Faber, the editor of the Gloom, Boom & Doom report.
"If the market rebounds, then get out," Faber said on Wednesday in a televised interview with NDTV Profit, on being asked what his advice would be for Indian retail investors.
The bear markets, globally, could last for "several years", Faber said. The value of returns could be superficially increased through inflation, but the real value will continue to slip, he claimed.
The 79-year-old analyst suggested that holding precious metals could be a viable alternative for Indian investors, as the value of rupee "will decline against the price of gold, silver and platinum".
'Colossal Losses'
The rally seen in the equity markets in the US and India last year was aided by retail investors, who pumped their savings into stocks without much deliberation, Faber suggested.
"Last summer, there was high participation of retail investors in the US market. The same happened in India... Many of these investors have no clue," he said.
Globally, all roads of speculative trading led towards AI chipmaker Nvidia and Elon Musk's electric vehicle giant Tesla, and then Bitcoin, the world's largest traded cryptocurrency, Faber said. "Now, things are reversing," he added, pointing towards the slump seen in the two stocks over the past couple of months. Over the past 30 days, Tesla has plunged over 30% and Nvidia is down over 17%, whereas Bitcoin has declined by 13%.
"Retail investors have suffered colossal losses in the last two months," Faber said, adding this segment of investors has faced similar losses in India as well over the past two months.
Faber does not see a recovery in major equity markets over the next few years. The US is the "biggest bubble in history," when their stock market is compared to the real economy, he added.
On the weaponising of import tariffs as a foreign policy by US President Donald Trump, Faber said it is the "worst economic intervention you can dream about.".
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