Fisher Investments’ Ken Fisher Debunks ”Don’t Fight the Fed”

Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher debunks the common myth that investors should not ‘Fight the Fed’. The theory suggests investors should avoid investing in stocks when the Federal Reserve (“Fed”) hikes short-term interest rates and invest when the Fed is loosening rates. However, as Ken wrote in his book Debunkery, Fed rate adjustments tend to have little long-term effect on capital markets.

While rate hikes may cause short-term downward volatility, Ken says the long term impacts on stock prices are largely unaffected by Fed decisions about rates. Ken explains how interest rate adjustments don’t tighten or loosen the amount of money available for lending, they change the price of that money. With history showing rising and falling stock prices regardless of the interest rate environment, Ken recommends putting little weight behind any Fed decisions and to stay disciplined to a long-term investment strategy.