Next Market Correction Could Be 2008 All Over Again Says This Expert
Although we are not yet in bear market territory, the next correction could resemble previous recessions, such as 2008, said David Stein, managing partner of Aerecura Capital.
"It could be very similar to corrections that we've had, including 2008, it depends on what the external factors are going to be that kind of come out of nowhere and surprise us," Stein told Kitco News on the sidelines of the Mines & Money Conference in Toronto.
Stein said that the increasing inflows into passive investment vehicles like ETFs create a risk factor for the markets.
"When these computers decide to sell, when their models turn negative, I think it could be quite a panic," he said.
Because of the impending risks to the downside for equities, Stein said that investors should be holding gold and safe haven assets as security.
"I was around during 2008. The correction had a front-row seat. After the initial panic, gold did extremely well, and it led the market out of that correction, and we had a really, really nice rally. It ended up being a great place to be, so I feel like that's going to be gold's role," he said.
This article was written by a staff member of TheStreet.