No revival in US; big economic crisis ahead: Marc Faber

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Q: Where does India fit in your preferred or not preferred list right now of markets?

A: I think India has gone up substantially and I think there are other markets that are more attractive to me than India at the present time. But equally, I think the Reserve Bank of India (RBI) has managed monetary policies very well, and I also feel that India is maybe less vulnerable to a downturn in business around the world than some of the other more export-oriented countries. So, in general, I think fundamentally I quite like India. Market-wise, I think a correction is also overdue.

The RBI has one of the best monetary policies in the world because they supervise the financial sector very closely. They have maintained relatively tight monetary policies and also they pay attention not only to core inflation which is not representative of the cost of living increases and is not representative of inflation in the system but the RBI also pays attention to rising and falling asset prices. So, I have to give them credit for being actually one of the best Central Banks in the world.

Q: Standing where we are right now after having had some very strong rallies across many asset classes, how would you split your portfolio between gold, other asset classes, equity markets? What would the mix be for you?

A: I am not representative because I participate in equity markets if they go up because I am involved in the financial markets and have various investments with investment companies and so forth. So, my asset allocation would not be representative.

But I'd like to emphasise that today as is usually the case, nobody knows how the world will look like in five years' time. So, I believe that people need to be diversified. It is not a question to be 100% in equities or 100% in bonds or cash. I think every asset class has a different set of risks and I would have some gold, and I would have some real estate in India and I am quite optimistic about real estate in India. I would have some equities, some cash and some fixed interest securities.