As growing fear that the US Fed is accelerating its rate hike cycle grips the market, the rise in Omicron cases also paints a rather bleak picture. To understand where the global market is right now, CNBC-TV18’s Latha Venkatesh spoke with Kenneth Fisher, Founder, Executive Chairman, Co-Chief Investment Officer of Fisher Investments.
According to him, the pre-price information market. Long-term bonds would have reacted if inflation had been a real concern. Fisher’s sage advice in this regard is to believe more in the market and less in the chatter. In fact, he expects global equity returns to be in the double digits. According to him, the only reason for a slow start to 2022 would be because investors are clinging to fears.
He said: “The reality is that markets value all widely known information in advance, that’s what they do. So you don’t have to worry about these things as they are pre-priced. I will tell you that concerns about the Central Bank’s rate hike are driven by concerns about inflation.”
“The simple concept in its most basic form is that if these were real issues, I guarantee you, we would have seen them in the long bond by now, and the long bond would have gone up already. quickly. And in fact, it’s been exceptionally benign the whole time,” Fisher added.
“People who have these concerns don’t understand history. They miss the fundamental story that when the world’s largest central bank, the U.S. Reserve Bank, first raised rates – 1-year, 10-year and 30-year – bond rates tended to be exceptionally stable, a little volatility, which is normal, but otherwise exceptionally stable the year before and the year after. So people should overcome these fears. These are just fears,” he said.
Fisher thinks the next trigger for the US market will be the midterm elections next year. He added that the US market will eventually pre-price the political stalemate as well.
When it comes to emerging markets, Fisher thinks 2022 could be better than 2021. He said the 2020 bear market run acted like an oversized correction because it was too fast and V-shaped.
“The big thing most people missed last year was the 2020 bear market, which it was technically because it was so big. ended so quickly and was so perfectly v-shaped and in that if you look at it as a huge correction in a bull market that has been going on for a long time and continues today, you better see that we are late in a market bullish,” Fisher said.
“Growth stocks and tech usually lead late in a bull market and it usually continues erratically until you get to the end of that bull market, which I think could still take a few years” , did he declare.
Regarding cryptocurrencies, Fisher said he doesn’t like them too much. However, he prefaced it by saying that although cryptocurrency is a potential risk, it’s unlikely to be one in 2022. He said, “Normally this stuff pops up after you have already started what is a normal type of bear market. The bear market starts first, bear markets usually start soft, not violent, then they get more violent later on and during that period you usually see these kinds of things blow up and become real problems.”
“I think it’s a potential risk, but I don’t think it’s a potential risk that’s likely to be a problem in 2022, probably after,” he said.
Watch the attached video for the full interview
(Edited by : Dipikka Ghosh)
First post: STI