Thursday, November 4, 2010

Billionaire Ken Fisher Sees 16% S&P 500 Rally After Elections

The Standard & Poor’s 500 Index may rally as much as 16 percent in the next six months because yesterday’s election will stymie legislative initiatives in Congress, billionaire investor Kenneth Fisher said.

Equities have surged since July as odds that Republicans would take control of the U.S. House of Representatives increased. President Barack Obama and the Democratic Party pushed through reforms of the health-care and financial industries this year.

“Markets don’t like big sweeping actions,” said Fisher, who oversees more than $38 billion at Woodside, California-based Fisher Investments Inc. “Right now, every politician is chirping and burping and carrying on. It’s been in the interest of the Republicans running for office to talk down the economy. That goes away immediately after the election. Come June, you’ll see how quiet the political landscape will be -- very little legislation and a lot of baby kissing.”

Fisher’s optimism is based in part on history. Stocks average gains of 11 percent in the third year of U.S. presidencies and haven’t fallen since 1939 when the Dow Jones Industrial Average lost 2.9 percent, according to data since 1833 compiled by the Stock Trader’s Almanac. The fourth year, when elections are held in November, is second-best, with an average advance of 5.8 percent. (more)

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