Part 3: Ken Fisher on Market Corrections

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 third part of a video presentation created for clients, CEO Ken Fisher and Fisher Investments’ Investment Policy Committee (IPC) discuss the unpredictable nature of market corrections (a short, steep, sentiment-driven drop of -10% or greater).  

It’s commonplace today to see theories of a correction lurking immediately ahead since we haven’t had one in more than two years. However, as IPC member Jeff Silk points out, “We’ve gone through many long periods in a bull market without having a correction.” For instance, there were no corrections between April 8, 1992, and July 20, 1998.[i] The 2002-2007 bull’s first correction began June 13, 2006—the next hit the following summer. And zero corrections occurred during the short bull market from 1987-1990.[ii] Corrections don’t run on schedules—that we haven’t had one for about two years doesn’t mean one is overdue. Plus, corrections happen quickly and are over before we know it. This is why IPC member Aaron Anderson suggests, “Riding right through them is the right course of action from an investment standpoint.”

In the video, Ken Fisher, Jeff Silk, Aaron Anderson and Bill Glaser cover the major factors behind Fisher Investments’ view that while there is always a possibility for a stock market correction, predicting when one will occur is a fruitless exercise.

 

 

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 06/09/2014. MSCI World Index returns with net dividends, 12/31/1990-12/31/2013.

[ii] Ibid.

 

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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