Personal Wealth Management / Market Analysis

Fisher Investments' Founder Ken Fisher: Time in the Market, Not Timing the Market, Matters More

Ken explains how investors may be tempted to sell stocks during downward volatility, which may not be in their best interest. While selling during downward volatility can be perceived as a way to avoid deeper losses, doing so could mean locking in losses and missing the market’s inevitable rebound. As Ken shares, “time in the market” is far more important than “timing” the market.

Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher discusses the benefits of staying invested in the stock market instead of trying to time the market, particularly for those looking for long-term, equity-like returns.

Consistently timing the market, Ken says, is nearly impossible. Rather than worrying about where the market is headed in the short term, Ken encourages investors to stick to their long-term investment plan. Historically, stocks have generated strong returns over time, inclusive of downward volatility such as corrections and bear markets.

Transcript

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Title screen appears, “Fisher Investments' Founder Discusses Positive Fundamentals Everyone Is Overlooking”

A man appears on the screen Wearing A navy suit, sitting in a office in front of a fireplace.

He begins to speak.

A banner identifies him as Ken Fisher, Executive Chairmen and Co-Chief Investment Officer, Fisher Investments.

ken fisher doing hand gestures time to time explaining.

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Ken Fisher: Because we've entered into an official bear market as of June 13 with a market closing below 20% off the highs at the beginning of January, the reality has become that an awful lot of people are very concerned about where the market goes tomorrow, this week, next week, next month. And that's all fine, I guess, and it certainly is great for headlines.

But let me make following point. If you have always been really good at figuring out where the market is going to go next week, next month, next year, you don't need any advice from me at all. But most people aren't. And in reality, for most people, unless you're that really, really, really good market timer of which there's pretty much almost none in history, and none that actually did that steadily on a long-term basis for years and years and years and years that we can find, then actually time in the market is more important than timing the market.

And I've said this for a long time, that for most investors time in the market is more important than timing the market, because the reality is that the very long history of the market generating very good returns, long-term averages fluctuating around 10%, capturing a lot of the upside of inflation, capturing the upside of corporate business growth, that long-term return includes every bear market ever, every correction ever. And to get that high return relative to alternatives that are liquid, all that matters is staying in. It doesn't require being a genius, it doesn't require buying the best stocks, it doesn't require anything other than stick-to-it-iveness. And that stick-to-it-iveness is something that in scary times people often get blanched out of.

But I encourage you to think through the fact that through things much worse than anything we face now were wars, the great influenza, much worse than COVID was, socio-political upheaval in America and around the world, the Cold War. And so many other things, including the 1960s, 70s, 80s stair-step inflation spiral, which was huge compared to anything that's happened recently where people are so afraid of inflation. That through all that period this process of capitalism enduring, and stocks ultimately reflecting that, and benefiting those who stayed in and got the benefit of time in the market instead of timing the market. That that's been rewarding for those as measured by history. And almost certainly the same processes prevail when we lookout at the next 5, 10, 15, 20, 30 years such that if you have an intermediate- to longer-term need for equity returns, that level of returns, you really can't find them anywhere else in something that's liquid.

And I encourage you to note the benefits of time in the market versus timing the market, and not let this kind of a short-term scary period scare you out of what's in your best interests.

Thank you very much.

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A Series of disclosures appears on screen: “Investing is Securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations. The foregoing constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice or a reflection of the performance of fisher investment 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. Not all past forecasts were, nor future forecasts may be, as accurate as those predicted herein.

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