Personal Wealth Management / Market Analysis

Fisher Investments' Founder Shares His Thoughts on the US Trade Deficit Reaching All-Time Highs

Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher shares his thoughts on the US trade deficit. Ken believes the word “deficit” is misleading. He notes investors often consider a deficit as negative—but in this case, it means foreign demand for US products and services is robust.

Ken believes the globalized nature of trade overshadows a single country’s trade balance and investors should focus more on how the world economy is performing as a whole.

Transcript

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Title screen appears, “Fisher Investments' Founder Shares His Thoughts on the US Trade Deficit Reaching All-Time Highs”

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

He begins to speak.

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

Ken Fisher doing hand gestures time to time explaining.

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Ken Fisher: So, I get asked off and on from time to time about my thoughts about the US trade deficit, particularly whenever it gets big and more so when it hits an all-time high, which it's done so many times in my life that I can't even remember.

 Ken Fisher: I'm going to be dismissive on this and say to you that my thoughts about the US trade deficit are about as time consuming for me as my thoughts about things that are in celebrity magazines. Namely, I see the covers of them when I'm in the supermarket and that's about it.

 Ken Fisher: When our economy is particularly strong compared to foreign economies, our trade deficit goes up. There is no such thing as a global trade deficit and it's the world you should focus on most importantly. It's always the world economy you should focus on most importantly, because our world, our countries are actually inter-tangled in trade.

Ken Fisher: Our trade deficit going up is not in and of itself in any regard a bad thing. Because it's associated with this formalized word deficit that makes you think of bad because deficits must be bad, must they not? I would encourage you to think of it differently, put a different word on the end of it instead of deficit. And every time that you hear the word trade deficit up, we're going to apply the word, ‘Maxine’.

Ken Fisher: We're going to call it the trade Maxine instead of the trade deficit. Just tell yourself the trade Maxine's up. And it's not the trade deficit, it's the trade Maxine. And how important is that? Because that's actually the truth. It's the global economy that matters. A country's single trade deficit is really a reflection of the country having strong demand at that point in time compared to foreign countries demand.

Ken Fisher: We're making everything we can make and more. We're buying everything we can produce and more. That's not a bad thing. There's another time when that goes the other way. Thank you so much for listening to me.

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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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