Fisher Investments' "Three Things You Need to Know" Dec. 23rd

Transcript

K.C. Ellis:

Hello and welcome to 3 Things You Need to Know this Week. Our regular series designed to help you sift through the noise across financial media and understand what really matters for markets.

Here are three things you need to know this week.

First, a recap of how stocks did this year.

At the start of 2024, we said this could be a strong year for global stocks, maybe even one with double digit growth. Back then, some investors thought this was too optimistic. But as we sit here today, global stocks are wrapping up the year with very solid gains. Now, that said, it wasn't always a smooth ride, as illustrated by this past week.

Before this most recent bout of volatility, the market had already had five separate pullbacks this year, and one of those was nearly 10%. That kind of volatility can feel stressful in the moment, but investors who stayed calm and stuck to their plans were rewarded. To us, that illustrates the importance of remaining disciplined and avoiding the temptation to jump in and out of the market. Volatility is normal, and long-term investors are probably better off looking past any short-term noise.

Next, let's talk about the "Santa Claus rally."

The "Santa Claus rally" is an age-old belief that stock prices often rise during the final weeks of December and into the new year. Sounds festive, right? Well, the truth is, it's not quite as magical as it sounds. When we look at the numbers, sometimes stocks rise at this time of year, and sometimes they don't. In our view, it's unknowable. And perhaps more importantly, it's of little importance for long-term investors. So, whether Santa leaves stock gains or a lump of coal in investor stockings, keep your focus on the big picture not on holiday market swings.

Finally, what risks should we watch for in 2025?

This time of year, many investors wonder what we should be worried about as we head into next year. Well, our official 2025 market outlook will be out in January. Our founder, Ken Fisher, also shared a great video in November with some early thoughts on 2025 risks. We've included the link to this video in the description of this show.

But here's what's important to remember about markets. They're always looking ahead. Stocks are constantly pricing in expectations for what's likely to happen in the next few months or even years. This means that a lot of the big stories you hear about, like recession fears or global conflicts, are already factored into stock prices. Unless something really surprising happens, something that nobody saw coming, these risks probably won't shake the market as much as you'd think. Understanding this can help you stay calm and focused on your long-term plan.

Thanks for catching this week's episode of 3 Things You Need to Know this Week. For more insights, check out our This Week in Review, released every Friday, or visit the "Insights" section on FisherInvestments.com. Tune in next week and don't forget to subscribe!