Investors should take a holiday from now on as the best part of the rally is over and now there are more chances that markets would go down, Marc Faber, author of the Gloom, Boom and Doom Report, told CNBC Friday.
"What I'm telling clients? I think the summer is shaping up nicely and to take a holiday essentially. Because I think the gravy is out. We had a huge rally March to June," Faber said.
"It looked a week ago as if the market would break down. When markets are about to break down and they don't then there's a counter-trend rally," he added.
The S&P 500 index might go as high as 970 or even 1020 but then it will turn down again, Faber predicted, adding that earnings figures must be studied thoroughly.
"We have to look very carefully at how these results were achieved because there's a lot of massaging of results right now," he said.
But for the long term investors should still favor stocks over bonds, according to Faber.
"I think a balanced portfolio of high quality shares like WPP and J&J…you buy the blue chips and you go to sleep, in 10 years time for sure you have made some money," he said. "Better to be a shareholder of something than somebody owes you something."