Is Now a Good Time to Invest in Stocks?

Transcript

Ken Fisher:

I can't tell you how many times I've run into people, and they ask me, is now a good time to invest in stocks? There's not a great answer for that. There's answers, but there's not a singular great one. Because it really, in many ways, depends more on you—or who the person is asking the question—than it does on the stock market, or the economy, or any of the things that impact them.

So, the fact is, in the long term, stocks tend to rise—and they tend to rise about two out of three time periods, regardless of what kind of time period you pick, whether it's days, quarters, years, five-year periods—they tend to rise a lot more than they fall. So, therefore, the odds are that it's an okay time to invest. The reality, however, is stocks are inherently volatile and they can fall for months at a crack, and in a correction, like we had in early 2025, which is not all that abnormal a thing to occur, they can occur for any reason or no reason at all, based on rumors, innuendo and fear. A little bit like somebody yelling fire in a crowded movie theater when there is no fire. The psychology works— that doesn't mean if people clear out from the movie theater, that they won't go back to watch the movie later, another time.

What I'm wanting to say to you is that, in reality, why investing in stocks in the first place? If you're investing in stocks for the long term, you get all of the down periods and all of the up periods. And the long-term history of stocks includes all of its down periods and all of its up periods. If you're trying to do short-term timing, well, you better be pretty darn good at that. And if you're really good at that, you don't need any advice from me anyway about whether this is a good time to invest or not. The reality for most people that I talk to is, when I ask them, well, why do you want to invest? What's the purpose of your money? What are you trying to accomplish? That's really the most important feature, and usually what I hear is something like, not always, "well, I want my investments to take care of me and my spouse for the rest of our lives." And I ask, anything else? And they say, "oh, you know, I'd like to leave some money to our children, maybe." Okay, anything else? "Oh, well, you know, there's some charity things that I'd like to give some money to." Okay, and anything else? And usually, the "anything else's" fall to almost non-existent after about that. Sometimes not. Younger people want to buy a house in three years, stuff like that. But it's really that which leads to your time frame of how long you're trying to make this money work for you.

And for most people, if the prime goal is take care of me and my spouse the rest of our lives, that time period is pretty long. And therefore, this month or the next couple of months aren't really very important. And then the question comes down to, is there some great ability to see something about today, now, in the period just ahead, just ahead, that make you think that this is a bad time to own stocks, since we know that two out of three times, basically, time periods, stocks tend to rise? Now, that can happen. But what you have to do to justify—going back to what I've said before and saying it slightly differently—is to justify saying that now, now should be a bad time to own stocks, when two out of three time periods, stocks tend to rise, inherently means since stocks pre-price all widely known information, things we can debate, what everybody talks about, that you have to know something important and negative that others don't talk about and don't debate about that inherently isn't priced into stocks, and that's not easy to do. That's hard to do. If you can do that, more power to you. And I've done that sometimes in my life, but rarely. If you can do that, you can see that it's a bad time.

Otherwise, you don't have a basis for a bad time, because let's say—and I'm making this up out of thin air, but it applies to lots of people—you either love or you hate Donald J. Trump. That's pretty common for both. Fact of the matter is, you're not unique at all in that regard, and that's all priced. You don't like what's going on with some thing on the global stage, whether it's Ukraine War, things in the Middle East. trade policies, this, that or the other. What do you know that other people don't know? Not just what you disagree with other people about. If you don't know something big and negative that other people don't know, the rest of the stuff has already been priced. And if you don't believe that, you don't understand how markets work. And if you don't understand how markets work, then you shouldn't make your own investment decisions.

But the fact is, it's not easy to know something big—either positive or negative— that other people don't talk about. And therefore, those exceptional decisions are very hard to come by. And I don't actually, right now, see anything that makes that happen. But I go back to what I said before—we could have a correction immediately ahead for no reason at all, just because it becomes the whim of the moment. Ben Graham famously said, legendary investor, so-called father of Security Analysis from the 1930s, famously said that in the long term, the stock market is a weighing machine; in the short term, it's a voting machine. What does that mean? And he might have said it the other way around, I think he did say it the other way around. In the short term, it's a voting machine, in the long term, it's a weighing machine.

But the voting machine is about popularity, which includes fads and fancies and things that actually you change your mind about later after you did it, because a lot of people voted for somebody for president who they later decided wasn't very good, or voted for something else that they later decided wasn't very good. But the weighing machine is about, in the long term, how stocks reflect what's going on in the global economy and, in the long term, because capitalism tends to keep making improvements that benefit the material world of humanity over time, in goods and services, stocks tend to rise; that's the driving feature behind it. And you have to see something other than the voting machine part, which is sometimes that function where stock just fall because people are freaked out about something, like a typical correction, and sometimes a bear market. You have to see the big, the bad that isn't pre-priced, or there's no basis for this not being a perfectly fine time to invest.

That was a longer answer than you probably wanted, but I tend to talk too long anyway. I do appreciate your patience and hearing me out. Thank you so much. Hi, this is Ken Fisher. Subscribe to the Fisher Investment YouTube channel. If you like what you've seen. Click the bell to be notified as soon as we publish new videos.