| David Dreman says investors should be prepared for high inflation rates — as high as 10 percent — to start within the next three years, and that the Obama administration is powerless to stop it.
Dreman, the well-known contrarian investor and CEO of Dreman Value Management, told Fox Business that the stock market will see a correction, although “it’s anybody’s guess” when that correction will occur.
He said inflation could rise to be as high as 8 percent to 10 percent within the next three years.
Dreman advises investors to hold onto their current stocks and “ride through” the correction. He also advises investors to stay out of long-term bonds because they will take a hit.
Instead, investors should go for very short-term bonds, equities, and real estate, he said.
Dreman predicts that interest rates will remain low since “no administration” will attempt to raise them with high unemployment rates. He said the current administration is both trapped and powerless.
“I think they are really caught here,” Dreman said.
The current state of the market is the “worst” he has seen. Dreman predicts a slow and painful recovery since the unemployment rate is high.
Dreman also said that gold is currently undervalued, despite breaking records daily. |
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Door Dentich op 8 december, 2009 | Reageer
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