The recent stock market crash is not an isolated incident and could be a harbinger of further economic difficulties, warns a billionaire investor Mark Mobius.

What happened: Mobius, CEO of Mobius Capital Partnersbelieves that Monday’s global stock market crash, which saw the S&P 500 record its worst one-day loss in two years, was not just triggered by weak U.S. economic data and the Bank of Japan’s interest rate hike. He suspects that deeper economic and political issues are at play.

While some analysts see the sell-off as a healthy correction for U.S. stocks, Mobius attributes it to rising global geopolitical tensions and the upcoming U.S. presidential election, according to a report in The Insider. He also pointed to the situation in Japan, which triggered a domino effect and led to a downturn in the U.S. market.

“It was not technical in nature. All of this combined creates a lot of uncertainty. And then the situation in Japan triggered a chain reaction and of course the US market collapsed,” he said.

Mobius believes that further declines in equity markets will occur in the future. The unwinding of carry trades, which has been identified as a factor in this week’s sell-off, is likely to continue.

“We are now feeling the effects of that reduction. If you look at the money supply growth in America, it is very low right now,” he added. “That means there is not a lot of money flowing into the market, into businesses or into the economy. So that is a real problem and a long-term problem for the future. We have more problems in the US and that will affect the global situation if the money supply is not increased much more than it is now.”

Also read: Billionaire investor Mark Mobius invests all his money outside the US: “I am completely focused on international and emerging markets”

He also expressed concern about the slowdown in the US labor market and the significant reduction in the money supply by the Federal Reserve in its effort to contain inflation, both of which could lead to “further problems in the future.”

“I think it’s a good idea to keep maybe 20% of your portfolio in cash, maybe a little bit more, because opportunities will arise in the future and it’s a good idea to have some reserves, let’s put it that way,” Mobius said.

Why it is important: Given the current economic climate, Mobius advises investors to keep a larger portion of their portfolio (around 20%) in cash to take advantage of potential future opportunities.

This advice comes in light of his expectation of further economic problems, which could provide investment opportunities in times of market downturn.

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This content was partially created with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.