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Fund Guru Predicts Market Downturn


The percentage of bullish versus bearish investment articles is generally skewed toward the bulls. Less frequently do renowned investors go on the record predicting an imminent market decline. Recently an article by Chris Newlands that appeared in Financial Times highlighted a bearish call made by investment guru Mark Mobius.

Who Is Mark Mobius

Mark Mobius is an emerging markets fund manager and founder of the investment firm Mobius Capital Partners. He has been a key figure in the development of international policy for emerging markets. Prior to starting Mobius Capital, he worked from 1987 to 2015 at Templeton Funds where he managed over 50 global investment funds. At 81 years of age, he has been around the world of finance for a while and has seen his share of upturns and downturns.

What Did He Say?

In the Financial Times article, Mr. Mobius has predicted that the US stock market is currently set up for a 30 % decline. He says that “all the indicators” predict a large drop in the S&P 500 and the Dow Jones Industrial Average. If this occurs, it would all but erase the last two years of stock market gains.

He specifically cites consumer confidence, which now at an all-time high, as being a dark cloud over the market. He indicated that the market is “Waiting for a trigger that would cause it to tumble.” What that trigger is is unclear. Mr. Mobius suggests that it could be a something like a natural disaster or war on the Korean Peninsula.

Mr. Mobius admits that the policies of President Trump are also a wildcard in the mix: “If Trump’s policies pay off then markets could move higher but things are just looking so ‘toppy’,” He believes, with many other pundits, that if the US market falls, the rest of the global marketplace is likely to follow.