Ken Fisher Explains What Slower Economic Growth Means for Markets

Economies around the world have largely bounced back since COVID-related lockdowns curbed much of the world’s economic activity. But, are higher growth rates the real economic story for investors? In his latest video, Fisher Investments’ founder and Co-Chief Investment Officer Ken Fisher explains why he believes extrapolating current growth rates is overly optimistic.
Gross domestic product (GDP) is a measure of an economy’s output. Stock investors follow GDP because of the natural linkages between economic output and the business results that help drive stock prices. While some investors have been excited about GDP growth rates over the last 12 months, Ken Fisher recommends paying more attention to the level of the economy, rather than the growth rate.
Before COVID struck, Ken explains, the US economy was growing at a moderate, but sustainable pace. COVID-related lockdowns constricted the economy. However, without the typical economic excesses that would need to be worked out in a normal recession, the economy was able to rapidly jumpstart growth as lockdowns eased and activity normalized.
Ken explains economies are now returning to their pre-COVID levels. That implies that growth rates will similarly revert to their pre-COVID levels. “Growth rates will moderate,” Ken says, but that’s not a bad thing. US economic growth, for example, was solid and sustainable—just not the supercharged rates seen since mid-2020.
The trouble comes when investors extrapolate the rapid growth rates of the recovery into the future, assuming the economic cycle to be in its early stages. Ken believes that we’re actually still late-cycle, and that current growth rates are unsustainable in the long term.
According to Ken, investors should expect a world that’s more like it was pre-COVID than anything investors experienced since COVID—on both the downside and the upside.
If you would like to learn more of Ken Fisher’s and Fisher Investments’ thoughts on capital markets, visit us at https://www.fisherinvestments.com/en-us.
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Видео Ken Fisher Explains What Slower Economic Growth Means for Markets канала Fisher Investments