This Week in Review | Ukraine-Russia Talks, Private Equity, Jackson Hole (Aug. 22, 2025)

Transcript

Tom Kirby

Hello, and welcome to This Week in Review. This weekly segment is designed to highlight a few important developments you may have missed this week, what they mean for markets and most importantly, the potential impact for investors. To stay up-to-date with our latest market insights, subscribe to our YouTube channel or visit Fisherinvestments.com. Now, let's review what happened this week.

First, an update on Ukraine-Russia peace negotiations.

In a series of meetings starting last Friday, President Trump met with Russian President Vladimir Putin, Ukrainian President Volodymyr Zelensky and key European allies to help negotiate a potential peace agreement between Ukraine and Russia. While investors naturally wonder about the potential market implications of a peace deal, history shows us that regional conflicts, whether beginning or ending, rarely alter the course of global economic growth or the stock market in a material way. Now, a peace deal would undoubtedly bring much needed relief from the devastating human cost of this war. However, we don't think investors should assume a peace deal means as much for stocks. Why is that? Well, global markets and supply chains have already adapted over the course of this multiyear conflict, reducing economic dependencies on both countries. And that said, a peace deal may remove some long standing concern that has dampened European sentiment, which could provide some additional tailwind for European stocks.

Next, the buzz over private equity.

Earlier this month, President Trump signed an executive order directing the Secretary of Labor to investigate whether rules should be relaxed to allow investors to invest in alternative investments such as private equity, within their 401ks. While this has generated significant media attention, it's important to understand that this order is only the first step in what could be a years-long process. It is not an immediate rule change. This development has prompted many investors to ask, "Well, what is private equity, and should I own it?" Private equity involves owning shares in companies that are publicly traded on exchanges. It's a popular investment category among institutional investors and ultra-high net worth individuals, because the returns can be quite lucrative. However, we believe private equity investments can carry significant risks that are often incompatible with many individual investors goals and needs.

One of those risks is limited transparency. For example, private companies don't have to comply with the same disclosure requirements as publicly traded companies. This means you're often unable to fully evaluate and understand the risks involved in the company's operations. Another common risk is poor liquidity. Your investment is often locked up for years, and while this might be fine for pension fund managers, it can be challenging for individuals who may need access to their money. Additionally, private equity often requires large minimum investment thresholds, which can introduce concentration risk for investors with more modest portfolios. Last but not least, private equity management fees and commissions are typically higher than those for stocks and bonds, which can eat into your returns. To us, private equity investments are best suited for investors who have a high capacity to assess the risks involved, along with low liquidity needs and the financial ability to absorb large losses over time should they occur.

Finally, the latest from Jackson Hole.

On Thursday, the Fed began its annual three-day Central Banker Symposium in Jackson Hole, Wyoming. This gathering brings together central bankers, finance ministers and economists from around the world to discuss monetary policy. In years past, the event has been notable for its speeches, where central bank leaders have introduced or hinted at monetary policy changes. Today's likely no different, as market watchers scrutinize Fed Chair Jerome Powell's speech for clues about potential rate cuts in September and beyond.

This whole exercise seems unnecessary to us. We think that hanging on the Fed chair's every word overlooks the reality that neither stocks nor the economy hinge on rates alone. Additionally, it's impossible to predict how officials will interpret future data. And central bankers have a long history of saying one thing and doing another. The Fed rarely knows in advance what it will actually do. For long-term investors, we think it's best to tune out the speculation from this week's gathering in Jackson Hole. Instead, focus on what central bankers do, not what they say.

That's it for this week.

Thanks for tuning in to This Week in Review. If you're looking for more insights, then don't miss our other series, 3 Things You Need to Know This Week, released every Monday. You can also visit FisherInvestments.com anytime for our latest thoughts on the markets. Thanks again for joining us and don't forget to hit 'like' and 'subscribe!'