Famed emerging markets fund manager, Mark Mobius thinks so. Even if you think Mobius is off base in his timing, be sure your portfolio is properly positioned for a 30% correction. If you are invested in the stock market long enough, a 30% correction is a near certainty. Proper preparation is essential for all investors, but it holds doubly true for retired investors and those approaching retirement who don’t have the time to recover from a big stock market drawdown.
Mark Mobius, the 81-year-old investment guru, believes the U.S. stock market is set for a 30% correction that would essentially wipe out the gains of the last two years.
“The market looks to me to be waiting for a trigger that will cause it to tumble. You can’t predict what that event might be — perhaps a natural disaster or war with North Korea.”
Mobius, who predicted the start of the bull market in 2009, has concerns that any fall would be amplified by the increasing use of exchange traded funds, which account for nearly one-half of all trading in U.S. stocks. His fear is ETFs would trigger further drops once markets fall.
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Jeremy Jones, CFA
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