Fisher Investments’ Founder, Ken Fisher, Explains the Midterm Miracle




Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher shares his thoughts on the market impact of US midterm elections. Ken observes how US stock returns in the fourth quarter of midterm election years have been positive over 80% of the time and have returned an average of around 6% since 1926—a dynamic underappreciated by many investors (1). He believes this phenomenon is caused by increased gridlock—a natural consequence of most midterm elections which can help prevent major legislation from passing. Ken says markets respond positively to political gridlock because a lack of meaningful legislation allows investors and businesses to take a longer, less defensive view.

Ken also discusses why this matters for global investors, pointing to high correlation coefficients between US and developed non-US stock markets. Ken believes the positive impact on markets could be better than usual over the coming year because, with a few exceptions, the stage is set for countries across Western Europe and developed Asia to see increased gridlock similar to the US. He thinks this will be a positive surprise most investors don’t expect—a bullish sign for markets.

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Fisher Investments’ political commentary is intentionally non-partisan. We favor no politician nor any party, assessing developments solely for potential market impact.

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Investing in securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations. The foregoing constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice. Nothing herein is intended to be a recommendation. The opinions expressed are subject to change without notice.

(1) Source: Global Financial Data, Inc., as of 9/28/2022. Average S&P 500 total return and frequency of gains from
September 30 of midterm years through June 30 of the following, 1926 – 2021.

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