Salient to Investors:

Ken Fisher at Fisher Investments said:

  • The rally that began in 2009 is only in its middle stages because most investors still underestimate the strength of the economy – in between the transition from skepticism to optimism
  • It is amazing that people do not marvel at the power of global capitalism and global economies.
  • If the Fed reduces QE the economy will grow faster because key interest rates will rise, encouraging banks to lend more money to companies for hiring and expansion.
  • Rising long-term interest rates are a positive sign.
  • Mr. Market is trying to see if it can turn you against your better judgment.
  • Gold through most of history loses money. Before the 2011 peak, people were hoping for QE to translate into inflation which did not happen.

Fisher said at the end of March 2007 that he was wildly optimistic – the S&P 500 went on to rise 10 percent about six months later, before falling as much as 57 percent through March 2009. In April 2009, Fisher correctly predicted the S&P 500 would extend a rally that started in March 2009. In January 2011, he correctly said not to expect high equity returns in 2011.

The Bloomberg Consumer Comfort Index shows Americans were the least pessimistic about the economy in 5 years.

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