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Ken Fisher Answers Questions on Stocks vs Bonds, China’s Economy and Bull Market Risks – Dec 2023

In this episode, Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer answers more common listener questions about finance and investing. Ken explains why stocks still perform better than CDs and cash-like investments in high interest rate environments. He looks at why the global economy continues to grow despite China’s slowing economy. Ken also highlights some underappreciated risks to the current bull market.

Want to dig deeper?

In this episode, Ken examines potential threats to the new bull market. In this video, “Fisher Investments’ Founder, Ken Fisher, Explains Potential Market Threats to Watch For,” Ken shares his opinion on risks that could derail the stock market. He explains that widely discussed fears are likely priced into markets to some extent, while surprises tend to move markets the most.

To find out more about how CDs and other “Safe Haven” investments compare to stocks in high interest rate environments, read “Fisher Investments Reviews If CDs Are a Safe Haven.” You’ll learn how CDs, while enticing during high interest rate periods, can actually be risky for investors requiring equity-like growth to fund their long-term investment goals.

And for more perspective on China’s impact on global growth, you can read these recent articles from our MarketMinder site: “China Q3 GDP: A Slight Turn in Sentiment” and “Needed Context for China’s ‘Disappointing’ Data.”

Have questions about capital markets, investing or personal finance? Email us at and we may use them in an upcoming episode.


Naj Srinivas
Hello and welcome to the Fisher Investments Market Insights podcast, where we discuss our firm's latest thinking on global capital markets and current events.

I’m Naj Srinivas, senior vice president of corporate communications here at the firm. Today, we’ll hear from founder, Executive Chairman and Co-Chief Investment Officer of Fisher Investments, Ken Fisher.

In this episode of Market Insights, Ken answers some common listener questions to help them better understand the world of finance and investing. 

Before we dive in, I'd like to ask you to rate and recommend our podcast wherever you listen to it. In just a few minutes, you can help make this valuable information available to even more people. Thanks so much for your help, in advance.

With that, let's dig in with this month’s Ken Fisher mailbag. Enjoy.


Ken Fisher
So every month I get questions from folks and I try to answer them here. The most common question today, that I hear ever, is why deal with stocks when I get a short-term guaranteed income off of CD [Certificate of Deposit] or Treasury at something like 5%? With interest rates so high, what do I need stocks for?

And let me just take a second on that. For most people, unless you’re in a tax deferred, or a tax-free account, unless you got almost no income, inflation and the tax rate will pretty much eat up all of that.

In the long-term, cash—like a CD—rates go up, rates go down, inflation rates go up, inflation rates go down. Long-term inflation, in the history of the S&P from 1925 on, has been 3% a year on average. Sometimes higher, lower. Stocks, 10% a year.

Owning stocks has tax advantages over owning Treasuries or bonds or CDs. This is the most common question I hear.

Another common question is, can global growth continue if China's economy stalls or falls backwards? Now, let me just say, it already has. It already did. They're struggling right now. And the fact of the matter is the global economy has kept growing. Robustly? No.

It's the second largest economy in the world. Having it go negative is a negative. But I want to also point out to you that, well, as it relates to capital markets, people fixate so much on China that there's very little that we learn about it that actually is new and surprises markets for good or for bad. The fact that the Chinese economy has been relatively stagnant the last few years is old news.

We're growing despite that it’s already occurred. Now, mind you if China imploded, that would be a very bad thing. If China's economy went [makes noise of finality], it's the second largest economy in the world and that would derail things. But there's no reason to expect that.

But just stalling or falling back a little in a recessionary period, like when they closed down the second time for COVID—more aggressively than anyplace else in the world—that's not a big problem.

Another question: How do you view the combination of high mortgage rates, low housing inventory and its potential effects on the economy? This one's a slight variation of the one I just answered.

Here, you're talking about things that’ve already occurred. The mortgage rates are there, the low inventory is there, the conflict is already there. Housing is not up. Apartment construction has probably been too strong, single-family dwelling construction is down.

The fact of the matter is, home buying is impacted by what you've already heard about, which is, you know, people don't want to give up their old low-rate mortgage to buy a house they might like where they have to pay the new higher-rate mortgage. And that keeps things down.

But it's been going on for a good long time now, so it doesn't really change much ahead. There's nothing drastically happening either inventory or to mortgage rates to make it change much. And that's the part. It's old news. Thank you.

Looking forward, what do positive third quarter earnings surprises tell investors? Well, mind you, this is again, the story has been going on for a long time now. Just every quarter, it surprises.

In 2022, we got the bejabbers scared out of us. So many features: rising inflation, rising interest rates, Russia and Ukraine war, all of this stuff that you remember when the ports were all backed up and what have you and you couldn't buy stuff, used car prices got so expensive, all those things.

The fact of the matter is, in the first quarter of 2022, people started expecting recession. They started expecting things to go bad. From that, businesses and people came to anticipate that, batten down the hatches as best they could, which did a lot of the battening down necessary to avoid having a recession in the first place.

This year, 2023, all year long, quarter by quarter, things have come in more better than normally they do. When we look at third quarter earnings, they came in much stronger than people expected and certainly much stronger than people expected a quarter back.

It's the same story. The reality is we are returning, not perfectly so, but mostly toward the normalcy that existed before the pandemic. We've had a lot of woom, boom, zoom and kadoom in that whole time period. But we're moving back to relatively normal growth rates. We're moving back toward relatively normal inflation. We're moving back to relatively normal. And in that, Q3 earnings surprise is just one more indicator that's where we're going.

What are some of the underappreciated risks to the bull market today? And are there things that you think no one is talking about but should be? Well, I've said this for a long time, I think one of the big risks is a whole series of things that relate to China.

I think China is past its prime. It's got a lot of features that will impede it moving forward—in its economy, in its growth, in its culture. And I think it's not the same, but a little bit like what happened to Japan after 1990. Different, but a little bit.

You know, there was a point in time that you may remember where Japan was just growing at a rapid rate. Its stock market was half the value of the global stock market. They were buying up things all over the world, including in America, real estate, every which way but loose, and ended up selling all that back later at lower prices because they had to.

It's not the same, because the Japanese economy the Chinese economy have a lot of differences. But there's also similarities there and I think China's got a similar fate. That fate is one where, yes, the global economy can grow as long as China does halfway okay. But it can't if China actually implodes.

The other is on China's southwestern border, you've got potential conflict between China, India and Pakistan that I've talked about now for well over a year that are brewing, that can seriously impede the world. Three nuclear powers, adjoining geography, cultural hostility between the three of them, periodic border conflicts and skirmishes and things that relate to the potential risk geopolitically that is much bigger than Israel/Hamas, much bigger than Russia/Ukraine, with a couple of fairly good-sized economies on top of one in particular India on top of China and big population. So that's another one.

Regulation is always a potential risk. There's an intuitive risk, but it's unlikely that somebody other than Trump or Biden becomes the nominee of the two major parties for President of the United States in 2024.

Right now, I think we're probably going to see a very mostly boring election with those two. You know, you really can't change anybody's view about either one of them hardly at all because we know them so well. We know these men and, I mean, this is the first time since 1892 that you got an incumbent president running against a former president who lost and ends up likely the nominee again. It's just hard to change our minds, about President Trump or President Biden, so I think we probably don't.

If something truly untoward happens and one of those two, if either of those two, or both of those two is not the nominee, then you could see some strange stuff. There's a lot of talk about that relative to a third-party candidacy of one form or another and third-party candidacies go nowhere fast. Or not very far fast and don't impact elections much, almost ever. You got to kind of be Ross Perot to do that. And we don't have a Ross Perot visibly on the horizon now.

Are there others? Yes. Do I know particularly what they are? No. What I can tell you is they're not any of the things widely talked about that you see in the media all the time that people say to you, “yeah, but” about, that people say to me, “yeah, but” about. Because the “yeah, buts” which are always about why are interest rates are too high, isn't that a problem? What about the price of energy? What about inflation? What about blah, blah, blah? Isn't Biden terrible for this reason? Isn’t Trump terrible for that? You go on and on and on. All the things people talk about commonly, that stuff doesn't do it.

It's got to be something big and bad, like some major conflict going on between China, India and Pakistan that nobody's really talking about or focusing on that would catch us by surprise and knock us asunder and be big and material.

Thank you for listening to me. I look forward to answering more questions next month. Thanks again.


Naj Srinivas
That was Ken Fisher answering listener questions as part of his monthly mailbag. Thanks to Ken for sharing his insights with us.

If you want to learn more about the topics discussed today, you can visit the episode page of our website, Fisher You'll find a link to that in the show description. While you’re on our website, you can also subscribe to our weekly digest, which rounds up our latest commentary and delivers it right to your inbox every week. And if you have questions about investing or capital markets that we can cover in a future episode of Market Insights, email us at

We'd love to hear from you, and we'll answer as many questions as we can in a future episode.

Until then, I'm Naj Srinivas. Thanks for tuning in.

Investing in securities involves the risk of loss. Past performance is no guarantee of future returns. The content of this podcast represents the opinions and viewpoints of Fisher Investments, and should not be regarded as personal investment advice. No assurances are made we will continue to hold these views, which may change at any time based on new information, analysis or reconsideration. Copyright Fisher Investments, 2023.

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