Personal Wealth Management / Expert Commentary

Ken Fisher Looks Back At Markets in 2021

Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher says 2021 had something good for everyone except bearish investors.

Transcript

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Ken Fisher doing hand gestures time to time explaining.

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Ken Fisher: So how did 2021 go? Well said simply, it was a great year for stocks. It was pretty good year for bonds, low interest rates, but bond prices that everyone expected would fall through the year didn't. It was a year that gave a little bit of something to everybody except for the bears.

Ken Fisher: It started off with a big move early in the year toward near euphoria with an emergence of special purpose acquisition companies, SPAC, IPOs, setting records, and having a form of dominance in the IPO market that they've never seen before. That near euphoric bloom started fading as fears grew of inflation, interest rate hikes, the continuity and evolution of the Delta variant, later the Omicron. As concerns built about the politics of America and the hostility between the parties. As you will remember full well, President Biden promised in his campaigns that he could unify the country. Clearly, the country is not unified. Doesn't really matter if you're on the democratic side of that spectrum or the republican side of that spectrum. You know, the country is not unified. And there's people on both sides tend to blame the other side.

Ken Fisher: But we're as polarized as we've ever been, if not more so. And the feature as the year progressed from the spring is stocks kept rising irregularly while more and more sentiment moved back toward just kind of normal optimism as opposed to the new euphoria. The SPAC market faded away, and only a very few SPACs would come to prevail. And those only some of the most, what you might view as spectacular ones, the reality of fears about interest rates going through the roof faded away. But with them, that did not become optimism. In fact, quite the contrary, as we moved toward a realm where early in the year, Fed Chair Jerome Powell had said, boy, inflation is transitory, to where he then said, it's not transitory. Now, if you've listened to me for any period of time, I always tell you, don't pay too much into what heads of the central bank say anyway. But that's neither here nor there. The fact is we've come to a world where people are very concerned about inflation, and is inflation this big bad thing here to stay? And that's again brought optimism down. When optimism comes down and stocks keep going up, this is archetypally and 2021 was archetypally a year that moved to its back half evidencing bull markets climbing a wall of worry. All these things that people feared while stock kept going up anyway.

Ken Fisher: And in fact, in December we have set closing record highs. And in that the bull market as measured by the broad markets and S&P 500 or the world has been a strong one. Growth has done a little better than value as I speak, but value has done pretty well. Small stocks, big stocks, this kind, that kind, it's given a little bit of some to everybody, and nobody's had a terrible time except the bears. So, as we think of that year, it's actually been, overall, a pretty darn good year, starting with a lot of optimism near euphoria, moving to a just optimistic year overall, that's no longer euphoric, that's built a base that has the potential to endure.

Ken Fisher: Thanks for listening to me.

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Ken Fisher finished talking, and 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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