Personal Wealth Management / Expert Commentary
Fisher Investments’ Ken Fisher, Answers Your Questions on Retirees’ Asset Allocation, the Fed & More
Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher answers viewer mailbag questions about retiree’s asset allocation, Federal Reserve policy and why the yield curve is different this time. Ken believes a retiree’s asset allocation should be determined by their individual financial circumstances and investment time horizon. According to Ken, investors with long time horizons should invest mostly in stocks. However, as one’s time horizon shortens—due to age or other circumstances—he believes reducing stock exposure to mitigate short-term volatility may be appropriate.
Next, Ken discusses the Federal Reserve’s impact on markets. Ken believes central bankers are mostly reactive to current economic conditions. Ken believes this reactivity leads to inconsistent messaging, which increases investor uncertainty and market volatility. However, Ken doesn’t expect Fed rate hikes to “kneecap” the economy since bank lending and credit creation remains healthy. Historically, a deeply inverted yield curve—notably, the difference between short and long rates—was a reliable sign of impending recession because it generally reduced bank profit margins and loan activity. However, Ken thinks the yield curve isn’t a useful proxy for bank’s willingness to lend currently—noting that bank lending has remained robust despite a rapid rise in short-term interest rates.
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