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Tags: Faber | Gold | Prices | Bubble

Faber: Gold Prices Aren’t a Bubble

Thursday, 03 May 2012 07:49 AM EDT

Economist and Gloom, Boom and Doom editor Marc Faber says gold prices aren’t a bubble.

"I doubt we are in a bubble stage," Faber tells goldnews.com. "When you went to an investment conference in 1989, everybody owned Japanese stocks. And in 2000, everybody owned tech stocks. That is the bubble, when the majority of market participants own an asset."

However, Faber does note that gold doesn't generate a cash flow and it is possible for investors to give it too big a position in their portfolios.

Editor's Note: The Final Turning Predicted for America. See Proof.

"I tell everyone that you have to be diversified in your assets," says Faber. "Assuming you had all of your money in physical gold, and it goes down, it's going to be difficult to save your position.”

"If you have a diversified portfolio and you have some physical gold and you have some fixed-interest securities and high-dividend shares and some real estate properties that provide you with some income, then if assets go down, you have at least have cash flow for reinvestment purposes."

Faber, who holds a large, physical-gold position, says he continues to buy a little bit of gold every month.

"I want to increase my allocation to gold," he says. "But I think there is a chance that before gold really takes off towards the upside again, that we have one more move on the downside. I wouldn't rule it out."

Meanwhile, Americans feel gold is the safest long-term investment out there, a Gallup survey finds.

Gold beat out four other types of investments perceived as the best long-term choice out there, with 28 percent choosing it today.

Real estate followed in second place, with 20 percent seeing it as the best long-term investment.

Savings accounts and CDs tied with stocks/mutual funds at 19 percent.
Bonds trailed at 8 percent.

"Investing in gold has gained in popularity in recent years as low interest rates have made traditional savings instruments less attractive, and instability in the stock and real estate markets has undermined the mass appeal of those options," Gallup reports.

Editor's Note: The Final Turning Predicted for America. See Proof.

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Thursday, 03 May 2012 07:49 AM
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