Lara Hoffmans, contributor and Forbes.com and editor at Fisher Investments MarketMinder, takes a long look at a few familiar stock market benchmarks: the MSCI World Index, DJI Index, and the S&P 500 Total Return Index, marking milestones and providing insights as to what this might mean for the economy for the decade ahead – Rob May, VP, Fisher Investments
3 Key Lessons from the Just Fine Decade
Lara Hoffmans, Contributor, Forbes.com
The DJIA surpassed its prior peak to much fanfare recently, and the S&P 500 Price Index to less. (Oddly, zero attention was paid when the S&P 500 Total Return Index surpassed its prior peak fully a year ago.) With the eurozone economy still flirting with recession and US stocks outperforming much of the developed world of late, all eyes are on the US.
Which means nearly everyone missed another interesting milestone. As of the end of Q1 2013, world stocks (as measured by the MSCI World Index) annualized 9.7% over the past 10 years. And that includes the big 2007-2009 bear market. Full article at Forbes.com: 3 Key Lessons from the Just Fine Decade
Post-Elections Japan – what’s the latest? — Rob May, Vice President, Fisher Investments
Shinzo Abe’s Unstimulating Stimulus
New Japanese PM Shinzo Abe fulfilled a key campaign pledge last Friday, when he unveiled a ¥10.3 trillion ($117 billion) fiscal stimulus package containing earthquake recovery and damage prevention public works projects, measures to support small businesses and the first defense spending increase in a decade.
Officially, the package is a supplementary budget for fiscal 2012/2013, which ends March 31. Abe plans to release the 2013/2014 budget by January 31—given his campaign pledges, further stimulus wouldn’t surprise. Whether it’ll work, however, isn’t clear—the government estimates these measures will add 600,000 jobs and 2% to GDP, which may be a touch optimistic. Still, these measures could carry enough short-term pop to help lift Japan out of its latest recession.
Full story on MarketMinder.com: Shinzo Abe’s Unstimulating Stimulus
Last week, Fisher Investments MarketMinder posted an insightful article on the US Federal Reserve and their overall policy direction. I’ve posted an excerpt below. – Rob May, Fisher Investments
More on the Fed
Fisher Investments Editorial Staff
In Thursday’s cover story, we broke down the Fed’s latest add-on to its “exceptionally accommodative” monetary policy, raising a few questions regarding the overall policy direction the US central bank is employing. (Though, at this point, calling the current policy “exceptional” seems like a bit of a stretch.) But the fun doesn’t stop there and, in reviewing media coverage of the announcement, we’re back with more, well, discussion.
For starters, the narrative that seems to be developing is that Fed Chairman Ben Bernanke is the last bulwark to attempt to defang the so-called “Fiscal Cliff.” (We’ll not get into the media’s fiscal cliff follies here, though we invite you to follow this link for a much more in-depth analysis.) But beyond the troubles with the common perceptions of the fiscal cliff, we struggle to see exactly how the Fed’s policies—which, by nature and if successful, would flatten the yield curve—are any sort of a help. It seems a bit illogical to suggest an overstated concern like the fiscal cliff could be mitigated by policy direction that is de facto contractionary. Full article here: http://www.marketminder.com/a/fisher-investments-more-on-the-fed/03ced852-a068-4510-9735-1cf7bfd9ad93.aspx
In the spirit of the holidays, Ken Fisher looks at capitalism as a source for societal good – Rob May, Fisher investments
Ken Fisher: Capitalism as a Source for Societal Good
By Elisabeth Dellinger
With the holidays approaching, the season’s merry music is all over the radio. My favorite: Band-Aid’s “Do They Know It’s Christmas?” in which a who’s who of early-80s alt-rock implored us to “Feed the world—let them know it’s Christmas time.”
Alas, 28 years later it’s clear music can’t feed the world’s 925 million undernourished people. But a force way more powerful can, if given the chance: free markets. When it comes to feeding the world’s starving, to quote my boss Ken Fisher, “I believe in capitalism.”
Don’t buy it? Consider India, where over 200 million people are undernourished. Indian farms produce enough food to feed all of the country’s 1.2 billion people, but around one-third of it rots before it reaches the market. Outdated harvesting means and storage capacity, unpaved roads and a lack of refrigerated trucks keep over 200 million people from getting enough to eat.
To fix this, India doesn’t need subsidies or charitable aid—it needs investment in food supply chain infrastructure. But several administrative and regulatory bottlenecks limit a flood of domestic investment, and protectionism has long prevented foreign investment. Attracting foreign investment would require letting in foreign supermarkets, which many fear would make life harder for the corner shops and market stalls that dominate Indian retail. So for the sake of protecting domestic commerce, India effectively barred foreign money and forced the supply chain to remain decades behind the times. Starvation persisted.
Read More from Elisabeth Dellinger and Ken Fisher at IBD: http://news.investors.com/investing/121212-636787-ken-fisher-capitalism-as-a-source-for-societal-good.htm#ixzz2Ewr74DFs
Check out what Ken Fisher has to say on the fiscal cliff on Equities:
Ken Fisher on the Looming Fiscal Can-Kick
As debate continues swirling over the presumed-slope-that-is-mostly-a-budget-debate also known as the “Fiscal Cliff,” a few details have been trickling out regarding the state of negotiations between Republicans and Democrats. The fact finding and wrangling sheds an interesting light on how the debate is evolving—and how strong the motivation actually is to strike a deal. In a recent Financial Times article, Ken Fisher (CEO of Fisher Investments) discussed how this debate is affected by the looming 2014 midterms. Here’s some more detail on the political pressures likely driving a fiscal compromise.
Read Ken Fisher’s full story here: Equities.com
– Rob May, VP, Fisher Investments
Mike Hanson, analyst at Fisher Investments, reads many books in a year. Here’s his latest book recommendation – Rob May, Fisher Investments
Michael Hanson, Fisher Investments
If you’ve never read Leonard E. Read’s I, Pencil, it’s always a good time. A wonderful summation of free market principles, it’s also a document Milton Friedman referred to often. Here’s a parting lesson, straight from the pencil himself:
“The lesson I have to teach is this: Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society’s legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed. I, Pencil, seemingly simple though I am, offer the miracle of my creation as testimony that this is a practical faith, as practical as the sun, the rain, a cedar tree, the good earth.”