NYT Best-Selling Author Predicts Significant Stock Market Decline in 2016

Markets FOXBusiness

Markets headed for the worst crash in history?

The Rich Dad Company founder Robert Kiyosaki argues a giant flaw in the 401(k) system will lead to the worst market crash in history in 2016.

New York Times best-selling author Robert Kiyosaki predicts Wall Street’s worst days are ahead, thanks to a combination of increased global terrorism and millions of Baby Boomers who are set to begin withdrawing funds from their 401(k) retirement plans.

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“Most investors…are investing for capital gains. And capital gains only occurs when prices go up. But if prices don’t go up, then prices have to go somewhere else…the question is are we going to see a 25000 Dow? I don’t think so,” Kiyosaki predicted on FBN's Varney & Co. Monday morning.

Kiyosaki explained that with more and more Baby Boomers beginning to take required distributions on their 401(k)s at age 70.5, he fears the distributions will create an imbalance of sellers and drive markets lower.

Combine that with a slew of terror attacks over the last year – including the latest in Brussels, Belgium that killed at least 35 people – and Kiyosaki said the markets are in for another downturn.

“In January of 2016, I think trillions of dollars were wiped out this year,” he said.

Indeed, thanks to a number of global pressures including fears of a worldwide economic slowdown, Wall Street saw the worst-ever 10-day start to a year in January. The major averages saw steep declines that sent the Dow Jones Industrial Average and the Nasdaq Composite into correction territory.

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However, Wall Street has managed to claw back from steep year-to-date losses – with the Dow back in positive territory for the period -- as U.S. economic data show the domestic economy remains on the path to recovery and the Federal Reserve continues to hint more rate hikes are in store for the back half of 2016. 

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