Harry Dent, best-selling author and economist, has warned that the stock bubble in the U.S. today is the biggest in history and that the “greatest crash of your life is just ahead…”
I’ve been telling our Boom & Bust subscribers for months now that the dominant pattern in the stock is the “rounded top” pattern I show in the chart below:
With stock market valuations in the U.S. in particular looking stretched and U.S. stocks looking very overvalued, we agree with Dent that there is indeed a real risk of a material correction in stock markets as there was in 2000 and in 2007. In presentations to clients we have looked at and explained why we view these markets as over valued and having all the hallmarks of bubbles about to burst.
Portfolios with very overweight allocations to equities and bonds are now at risk and there is a strong case for increasing allocations to cash and gold. Careful consideration should be given to who you deposit your money with and store your gold with. Counter party risk and the return of capital rather than the return on capital will assume importance once again in the coming years.
DYI
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