The U.S. stock market showed strong upward momentum, with the S&P 500 finishing 2025 up about 16%. However, veteran investor and economist Marc Faber stated in a recent interview with Wealthion that 2026 will not be positive. When asked about his expectations for the year, Faber responded, "It will be doom."
His concern arises from decades of money printing and inflation, affecting both living costs and what he described as "badly inflated" asset prices over the last 40 years. Faber pointed to interest rates as a factor that could unsettle U.S. stocks this year. "In my view, this year we’ll get a big breakout of interest rates either up or down and the stock market will not like it," he said.
He explained that current interest rates are not particularly high, with the 10-year Treasury yielding roughly 4%. At the same time, he believes the cost of living is rising between 6% and 12% annually. "So the interest rate is not high in real terms and that is an inflationary environment," Faber said. He added that significant rate declines would only occur if growth is overestimated.
With the U.S. stock market near all-time highs, Faber noted the word "bubble" is surfacing. He cited investor behavior as a key warning sign. "Most people own Tesla and Nvidia around the world," he said. "They trade them 24 hours a day. And they trade options and all kinds of products. Leverage is a symptom of excessive money in the system and of a bubble."
Faber expects a correction in stocks and also sees excess in residential real estate, which he believes is in a colossal bubble. "For the middle class the bulk of the assets is residential real estate and that I think will go down because it's in a colossal bubble as well," he said.
His concerns extend beyond markets. Faber warned that political intervention could worsen the outlook, including under President Donald Trump. "I would have voted for Mr. Trump any time compared to the Democrats, but he is an ignorant interventionist," Faber said. "He intervenes in everything and sooner or later he’ll make a major disaster."
When asked about holding cash, Faber stated it is not his preference. He argued that "all currencies are bad — all paper monies are bad," consistent with his warnings about inflation eroding purchasing power.
Instead, Faber expressed confidence in precious metals. "I feel more comfortable to own silver and gold and platinum," he said. When questioned if the recent run-up in precious metals could continue, he responded, "Yes." He added that most people still have very little gold as a percentage of their total assets.
This view is echoed by Ray Dalio, founder of Bridgewater Associates, who said last year that people typically lack an adequate amount of gold in their portfolios and that gold is an effective diversifier in bad times. JPMorgan CEO Jamie Dimon recently stated that gold could easily rise to $10,000 an ounce in this environment.
Despite his broad warning for U.S. stocks, Faber favors high-dividend stocks. "I own gold.... but I like cash flow. I like high-dividend stocks. I like stocks that have a dividend yield of 7% or 10%," he said. He emphasized the impact of compounding interest, noting it can lead to significant returns over time.