Ken Fisher on Market Crashes, US Debt, Construction and More - Oct 2026

Transcript:

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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, Executive 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 you better understand the world of finance and investing.

But before we dive in, I'd like to ask you a favor. Recommend our podcast and rate it wherever you listen. 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.

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Ken Fisher

Every month I get questions sent in to me, and I get them typed up on these little papers so my septuagenarian feeble eyes can read the large print and then I try to give you short answers, which is nearly impossible for me to answer anything quickly. I tend to be too ponderous, but I've got just a few here, so I'll rattle through them.

The first one is, are 50% market crashes and recessions less likely today, and might they recover faster? I wouldn't make any answer to that at all. I don't think there's a way to know that. I don't think we know that that's true or not true. Let me just argue. It is true that today, because of everything that's evolved over the decades in computerization and since we had the last business cycle recession, or even since we had the 2020 Covid driven governmentally induced market contraction. Business cycle contraction, not really a recession in its traditional sense. Even throughout that whole period, we have been getting more and more and more and more information. And maybe that means we know more about underlying problems in our businesses and how to fix them and keep them under control. Maybe it means with the more access to information that we can respond to things quicker, maybe it means we just know more. Maybe it means we're more arrogant. And so maybe that's a bigger risk. It's really hard to know because there's not really any evidence to base it on that you can firmly grasp. We've had a long time now since we've had a 50% market crash, and it's been a long time since we've had a business cycle recession, so it's hard to measure the truth of that.

An easier one to answer, in a very simple sense, is what does history tell us about government debt exceeding GDP? And the answer is, it doesn't tell us a darn thing. I understand why people fear large numbers and why they fear one number growing relative to another number. But the fact of the matter is, we have a long history of government debt in our country and in other countries. We have a long history of GDP in our country and other countries, and GDP itself in relation to government debt itself, does not tell you anything about anything, no matter what you want to think.

Are construction trends among the most important economic indicators to be watching since they're connected to so many subsectors. The last part of that question is the part that I find curious, connected to so many subsectors. Well, I don't know that construction trends are connected to any more subsectors than a lot of other trends. For example. Don't people in the movie industry eat beef? Don't people in the construction industry eat beef? Is it the cattle industry that's connected to construction, or is it the construction industry that's connected to beef? Where's the beef? I don't know. The fact of the matter is, construction trends aren't really in and of themselves a great leading economic indicator. Since they're not a great leading economic indicator, it would be hard to say that it's particularly uniquely important to be watching. I mean, is it wrong to watch it? No. Does it stand out as different than so many other things? No. It's not a great leading economic indicator.

How do I know if I'm taking too much or too little risk? Tough one to put a metric on. It's an easier one to put into a different frame. You're taking too much risk, if market volatility makes you change the way you think about what you should be doing with your investments. You're taking two little risk, if market volatility doesn't make you think. Now mind you, think is different than feel. If market volatility makes you feel like you should rethink your investment approach, then you're taking too much risk. For the most part, risk is about can you hold successfully to a rational long term investment plan. A rational investment plan that gets you to where you need to be in the long term. Whatever that means, tied to your specifics and your requirements. Once you set up that plan, you're not taking too much risk, If market volatility doesn't make you feel like you should change what you're doing. If it makes you feel like you should change what you're doing, that's a feeling and the feeling is the risk. Two little risk means that market volatility doesn't make you think. Normally market volatility should make you think but not feel. That’s the best short answer I can give you.

Thank you for listening. Tune in next month where I answer more questions. I call these “The mailbag”. Send things into “the mailbag” and I'm delighted to answer them. Take care.

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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 Investments.com. 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 marketinsights@fi.com.

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.

Disclosure:
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.