Ken Fisher, the founder and executive chairman of Fisher Investments, discusses the importance of knowing something others don’t when it comes to beating the stock market. He talks about his past successful forecasts for 2023 and 2024, but admits that for 2025, he hasn’t yet found a definitive basis for a forecast. Fisher emphasizes that overconfidence is the enemy and that good forecasting requires assessing a variety of factors such as economics, politics, and sentiment to find big, definitive forces that others don’t see.
Fisher believes that three possible outcomes for the stock market in 2025 are: a 20%-plus boom, a slight dip, or low-single-digit gains. He mentions that professional forecasters’ consensus forecasts often reflect already pre-priced information and are therefore not accurate. Fisher acknowledges that politics and sentiment are in a state of flux as the year comes to a close, making it difficult to rank his three scenarios. He emphasizes the importance of finding unseen factors that could impact the market.
The happiest scenario for 2025 would involve the market booming 20% plus, although this would surprise most investors. Fisher points out historical statistics, such as steep tumbles after a bull market high often leading to positive returns a year later, and the positive market performance during presidential inaugural years. He also discusses the potential negative impact of a Republican victory in 2025 due to heightened expectations and the risk of disappointment.
Fisher’s third scenario for 2025 involves stocks rising slightly amid differing geographic sentiments. Bearish Europe contrasts with bullish American sentiment focusing on US exceptionalism in AI, tech, and crypto. These conflicting sentiments could potentially offset each other, resulting in minimal gains for the market. Fisher plans to wait for more political and sentiment developments in early 2025 before making a definitive forecast.
Fisher advises investors to stick with stocks for growth, as they have historically risen in almost 75% of calendar years. He warns against betting against such odds without a strong advantage over others and suggests that exiting stocks should only be considered if there is significant negative information that others are unaware of. He quotes Jack Bogle, recommending investors not to make impulsive decisions but to carefully evaluate their options.
In conclusion, Fisher discusses the importance of finding unique insights to beat the stock market and emphasizes the need for caution and prudence in investing decisions. He remains optimistic about the market’s future despite uncertainties, and intends to provide a definitive forecast for the rest of 2025 once more information becomes available. Fisher’s experience as a successful investor and his analysis of various market factors provide valuable insights for investors looking to navigate the stock market in the coming year.
