Meb Faber, the CEO and chief investment officer of Cambria Investment Management, told Business Insider he was not surprised by the market's plunge — and not just because one of his funds is soaring.
Perhaps one thing that is unprecedented is the social distancing and business shutdowns that the coronavirus is simultaneously forcing on cities worldwide. The best way to hedge this stock-market risk is not taking it in the first place, Faber said. That does not mean being uninvested. Rather, it means filling a portfolio with multiple kinds of assets that can counterbalance each other.
Gold also had a 0.8% average return but logged a 17% loss during the financial crisis in October 2008 — matching the stock market's loss and providing zero diversification benefit.
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