Stock Market on Verge of 1990s-Style Opportunity?
The stock market could be on the verge of a 1990s-style opportunity, said Ron Baron, CEO of Baron Capital.
"In the 1980s and 1990s we were doubling every four or five years," Baron told CNBC.
Continued uncertainty over Europe's debt crisis has pumped fear into the market. "Because everyone is afraid to invest, stocks are at their lowest level in my lifetime," he said.
While the U.S. economy has exhibited some signs of growth, many investors remain reluctant to jump into the stock market. Just this week, Fed Chairman Ben Bernanke reiterated his concerns about high levels of unemployment.
Rather than take advantage of depressed stock prices, financial advisors are moving money into "safe" bets,like gold and bonds that actually don't offer attractive valuations, Baron said.
"People are thinking that interest rates are safe when if you invested in fixed-income in the 1950s, you would have lost 90 percent of your buying power," he said. "A dollar then equals 10 cents now."
Plus, the government plans to inflate itself out of debt, making fixed-income an even less attractive place to park money in the long-term.
"They're going to have 4 percent inflation and 2 percent interest rates," he said.