Part 2: Ken Fisher on Geopolitics and Stocks

Fisher Investments |

Legendary investor Ken Fisher, CEO of Fisher Investments, will be delivering the keynote address at the inaugural equities.com Small-Cap Stars Conference at the NASDAQ MarketSite on December 18, 2014. This is part two of equities.com's interview with Ken. Be sure to read part one of our interview here, and part two here.

In an excerpt from the second part of a video presentation created for clients, CEO Ken Fisher and Fisher Investments’ Investment Policy Committee (IPC) discuss recent geopolitical turmoil and reasons they believe the existing conflicts are an overstated risk. Many people see the world burdened by regional conflicts—namely in Ukraine and Iraq—and are puzzled why stocks continue to rise instead of fall.

As Ken Fisher says, “We have a very long history of geopolitical conflicts that are effectively regional conflicts that don’t get beyond regional … And they simply do not kill bull markets.” In this bull alone, tensions have escalated in Iran, Syria, Libya, Tunisia, Sudan/South Sudan, Israel, Afghanistan, Iraq and more—and while stocks might have squirmed some at first, none ended the bull. These types of localized conflicts are neither new nor unusual for stocks. Earlier examples—the Korean War, the Cuban Missile Crisis, the 1967 Six Day War between Israel and several Arab states, two official Iraq wars in 1991 and 2003 and 2006’s Israel/Hezbollah fighting—also didn’t drag down stocks for long. Stocks may have wiggled slightly—like a brief dip when hostilities in the Korean War began—but a bear market didn’t develop and stocks overall rose throughout![i] It takes a global conflict like World War II to drive a lasting, material shift in the market cycle.

In the video, Ken Fisher, Jeff Silk, Aaron Anderson and Bill Glaser cover the major factors behind Fisher Investments’ view that while risks exist, none are surprising or big enough to knock the bull off course.

 

 

Investing in securities involves the risk of loss. Past performance is no guarantee of future results. Investments in foreign stock markets involve additional risks such as losses related to other currencies and securities markets. No guarantee is made regarding the accuracy of any market forecasts or the success of any investment strategy. This commentary constitutes the general views of the author and should not be regarded as personalized investment advice or a reflection of the performance of Fisher Investments, its subsidiaries, or its clients. Nothing herein is intended to be a recommendation or a forecast of market conditions. Rather it is intended to illustrate a point. Current and future markets may differ significantly from those illustrated here. Fisher Investments and its subsidiaries may or may not hold the securities mentioned herein in client portfolios. Not all past forecasts were, nor future forecasts may be, as accurate as those predicted herein. This article is from the year 2014 and statements made as of this date may no longer be applicable.


[i] FactSet, as of 07/21/2014. S&P 500 Price Index, 12/31/1950-12/31/2006.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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