Robert Shiller joined Consuelo Mack on WealthTrack this past weekend to discuss the ongoing problems in the economy. Shiller of course is notable for having predicted both the Nasdaq bubble and the housing bubble. He remains one of the few academics who understands how markets and the broader economy relate to one another.
In this interview Shiller explains why he believes the psyche of the investing class and the general economic participants are being negatively impacted by the economic malaise. He refers to it as a positive feedback loop that is very difficult to reverse. In equities, Shiller makes some rather alarming comments. He says the current volatility is not healthy and could very well be preceding a “substantial” decline in equities. He makes no firm predictions, but he maintains that the current fragile environment could result in major downside.
He explains why equities still appear expensive, why housing is likely to remain under pressure, why the general economy is likely to suffer a continuing malaise and why TIPS are his favorite investment currently:
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.