Legendary investor Ken Fisher, CEO of Fisher Investments, will be delivering the keynote address at the inaugural www.equities.com Small-Cap Stars Conference at the NASDAQ MarketSite on December 18, 2014. This is part two of www.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.
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