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Jim Rogers says the next stock market crash will be “the worst” – and names two safe assets

“America has had a problem for a long time”: Jim Rogers says the next stock market crash will be “the worst” – and names two safe assets

The stock market has shown robust upward momentum in 2024, with both the S&P 500 and Nasdaq Composite posting double-digit gains year-to-date. However, renowned investor Jim Rogers is sounding the alarm.

In a recent interview with ET Now, Rogers expressed that he was “extremely concerned” about the upcoming developments.

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“The United States hasn't had a problem since 2008, 2009 – that's the longest period in American history,” he explained. “America, and therefore the world, hasn't had a problem for a long time.”

With such a gloomy forecast, the average investor's priority is likely to be reassessing asset allocation. For Rogers, that means prioritizing cash.

“I have a lot of cash. The reason is that I expect the next sell-off to be the worst of my life because debt has increased so much everywhere,” he said.

The rise in global debt, particularly in the United States, underscores his concerns. According to the latest fiscal data from the U.S. Treasury Department, the U.S. national debt now stands at $35.21 trillion.

Rogers knows how to navigate turbulent times. He founded the Quantum Fund with George Soros in 1973, in the midst of a devastating bear market. From then until 1980, the portfolio returned 4,200%, while the S&P 500 rose 47%.

During the interview, Rogers mentioned that despite his significant cash reserves, he was in no rush to deploy the money.

“I am not spending my money yet. I would like to have more money because, I repeat, when the next stock market crash comes, it will be the worst of my life,” he stressed.

Rogers is not the only respected investor who has cash reserves.

Warren Buffett's Berkshire Hathaway also has a significant cash reserve. According to Berkshire's most recent quarterly report, the company's cash and cash equivalents were $224.2 billion as of June 30, 2024 – up from $121.8 billion in 2023.

However, there may be some areas in the market that still offer profit potential today.

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To be fair, Buffett's accumulation of cash does not necessarily indicate a pessimistic outlook. But in Rogers' case, his strategy is rooted in his concern about the sustainability of the ongoing bull market.

“Everywhere has been doing so well for a long time. Any time everyone is making a lot of money, historically it's a cause for concern. That's why I'm worried,” Rogers explained.

Despite his cautious stance, Rogers pointed to some potential opportunities in the market.

“If I were to buy today – and I'm not – I would probably buy silver or agricultural goods,” he revealed.

Precious metals like gold and silver are often seen as a hedge against inflation because they cannot be printed by central banks like fiat money. In 2024, gold has attracted a lot of attention from investors and pushed its price to new highs.

While silver has also rallied this year, it is still well below its all-time high. Rogers stressed that this discrepancy is a key reason for his interest in the metal.

“Silver is down 40 or 50 percent from its all-time highs…gold is at all-time highs,” he said. “Silver is down — it's hard to find things that are down.”

Rogers' interest in agriculture follows a similar logic.

“I was optimistic about agriculture because agriculture was in crisis,” he noted.

Although agriculture does not often make headlines in the financial media, it plays a crucial role in the global economy. After all, food is a necessity, and investing in agriculture could be a way to profit from a sector that remains indispensable across economic cycles.

This article is for informational purposes only and should not be construed as advice. It is provided without warranty of any kind.

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