Investing.com - While the markets could experience turbulence in the short term as recession looms in several parts of the world, some stress that the very long-term trend in the economy remains positive.
This is particularly true of billionaire investor Ron Baron, who told CNBC on Saturday that equities would see big gains over the next half-century because of persistent inflation that would make everything "twice as expensive".
He pointed out that the risks of a recession in the face of rising inflation have nothing to do with the overall trajectory of the market, which he said has been upwards for most of the past half-century.
Baron also pointed out that according to his calculations, and despite the various wars, recessions and pandemics that have marked recent decades, equities are currently worth 34 times what they were in 1970.
The investor also pointed out that economic growth has also soared over this period, with GDP reaching $26 trillion in the last quarter, compared with $1 trillion in 1970.
Against this backdrop, he predicted that economic growth in the US should continue to accelerate and exceed 7% over the next 50 years.
"I expect inflation to be as it always has been, as it always has been in every democracy that has ever existed, which is 4% to 5% a year," Baron said.
"That means your money will grow 35-fold over the next 50 years. That means that the Dow Jones, which is now at 34,000, will be at 900,000," he added.
However, he warned that the downside could be further hardship for consumers.
"I think everything will be twice as expensive in 14 or 15 years' time," Baron said, adding that "inflation may come down a little, but not permanently".
(Article translated from French using DeepL)