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Fisher Investments Strategy
Many firms specialize in one static style of investing. At Fisher Investments, we believe that no one style of investing is right all the time, and no one style can maximize returns while minimizing risk in all market conditions. Because of this core principle, Fisher Investments has built our investment strategy on a dynamic approach, allowing us to change our investment mix based on our view of global market conditions. This allows Fisher Investments to be flexible in all types of market and economic environments.
Fisher Investments' dynamic approach is a departure from the conventional investment strategy many financial firms employ. We have found that being dynamic allows us to navigate more smoothly through varying market environments and better capitalize on current opportunities. Our dedicated research staff and the Investment Policy Committee continually monitor capital markets to determine the optimal positioning of client assets. Portfolios are engineered with a flexible strategy and optimized based on our view of changing conditions over the long term.
Active vs. Passive Management
Index funds have grown in popularity as an investment approach, but they are no panacea. In fact, Fisher Investments believes there are many risks and pitfalls associated with index fund investing.
Investing in index funds is a form of passive investing—there is no active decision-making process, and almost no possibility of outperforming the individual indices they track. Investors are often lured into index funds mainly by low management fees and the desire to settle for average market returns. Fisher Investments would like you to consider the points below.
- The index fund investment approach can only deliver market-like returns. Index fund strategies generally park an investor’s assets in multiple index funds to track myriad indices such as the S&P 500, Russell 2000 Value, Nasdaq, MSCI EAFE, and so on. But picking the optimal index fund(s) and when is very challenging.
- The index fund approach offers no downside or defensive strategy, leaving investors fully exposed to bear market losses. An investor must passively accept the results of index-like performance with index funds. Some investors might try to avoid a bear market by timing market movements—a tactic very few (including professionals) have done successfully over time. More often than not, the individual investor is in the driver’s seat making buy/sell decisions themselves.
- Tax Benefits: Fisher Investments’ high net worth individuals can receive certain benefits from direct ownership, particularly from a tax perspective. Owning individual stocks enables the investor to use capital losses to offset capital gains. Index funds don’t opportunistically pass capital losses through to shareholders.
- Cost-effective ownership: Owning stocks is the cheapest form of equity ownership—no middleman or extraneous management fees associated with index funds.
- Direct ownership: Index fund investors do not directly own shares in company’s stock. Instead, they only offer ownership in a fund that owns the constituents of an index. Stocks represent a share of direct ownership in a company, which guarantees certain shareholder rights and benefits.
To learn more about Fisher Investments’ strategy decisions and investment approach, please contact 1-800-587-5512 or visit:
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