A common adage among fellow behavioral finance devotees is "bull markets climb a wall of worry". This means simply that bull markets thrive on investor skepticism. It doesn't mean, however, that many risks and worries aren't valid things to be concerned over for society at large. But just because there are legitimately worrisome things out there doesn't mean they'll sink stocks, either.
It all harkens back to the fundamental, basic premise of investing: capital markets are effective discounters of widely known information. To be a successful investor, one must identify information not widely known, or interpret widely-known information correctly and differently from other market participants.
In other words, if it's widely known or misunderstood, it can't sink stocks. Take a look at the list of worries we've had to deal with since the bull market began in 2003. (And this is just what we could come up with off the top of our heads!)
Woah! If someone would've told people all these things would happen over the last 4 years, most would shutter themselves in. That's a sheer skyscraper of worry to climb! Yet, cogent analysis shows us each of these fears is unfounded in their ability to affect stocks negatively. The underlying fundamentals have been strong all along. Here's the result (to name a few):
We say: keep the worries coming. Stocks have got further to climb.
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*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.
