Spotlight on Michael Hanson, Senior Vice President of Research, Fisher Investments
Global Thought Leader Spotlight
Michael Hanson, Senior Vice President of Research, Fisher Investments
In my role as Senior Vice President of Research at Fisher Investments, I oversee the Research Group and the development of capital markets and securities research. I am also a member of the five-person Investment Policy Committee (IPC). As a collective, the IPC have full discretion and accountability for all portfolio themes, security selection and portfolio construction.
Equity Market Sentiment & Outlook
A Resilient New Bull Market: Young bull markets are stunningly hard to derail. Those that reach to be one year old almost always reach two.
Improved Investor Sentiment: While sentiment has perked amid improving economic conditions, we are still far from euphoria—providing ample room for upside surprise and big gains.
Politics is a Tailwind in 2024: Since 1925, US equities ended positive in 83.3% of presidential election years. Globally, political uncertainty is likely to fade throughout the year, further reducing investor anxiety.
Opportunities On The Horizon
Stronger than expected corporate earnings growth, easing inflation, and improving sentiment should support markets.
While growth equities have led thus far in this market cycle, we remain watchful for a potential lasting shift to more cyclical categories, which typically leads to a better-than-expected economic environment.
Offensive value categories, such as Energy, are likely to perform well while also providing diversification benefits.
The Implications for Institutional Investors
Halfway through 2024, global equities are delivering solid returns, with the MSCI ACWI Index up 13.7% (A$ denominated returns) in the first six months of the year, led by Tech and Tech-like communication services equities.
Emerging Markets (EM) also contributed to the index’s year-to-date performance, with the MSCI EM Index up 9.8% (A$ denominated returns). In our view, global equities’ returns thus far amounts to a typical start for historically positive election years.
However, headlines disagree. They see many equity markets already beating their long-term average annualised return and argue it is overdone. But average returns aren’t normal.
In bull markets, equities routinely skew to the extremes. Better still, 15 of 16 US election years with positive first halves saw second-half gains—7 of 8 when first-half returns surpassed 10% (US$ denominated returns). We doubt it will differ this election cycle.
Today, the analysis of how former President Trump will match up with Vice President Kamala Harris is in full swing. The race very likely hinges on campaigning, grassroots efforts and turnout in six states. And, as this unfolds, uncertainty will fade.
Eventually we will have a winner, which usually warms sentiment regardless of personality or outcome. Investors, distracted by emotion and bias, forget this. But equities are party-blind and politically agnostic, focusing most on the likelihood of major legislative change. Hence, higher risk may loom in 2025 depending on the government structure the election delivers, but a strong 2024 finish should come first.
Michael will be presenting at Global Investment Institute’s upcoming Equities Investment Forum, taking place on Wednesday, 11 September 2024 at the Grand Hyatt Melbourne, Victoria.
To register your interest in attending, click here or for more information email zlatan@globalii.com.au.
Michael Hanson, Senior Vice President of Research, Fisher Investments
Michael is a Senior Vice President of Research and a member of the Investment Policy Committee (IPC). In those roles, Michael oversees the Research Group and is responsible for the development of capital markets and securities research.
Michael joined Fisher Investments in 2002 and has served on the firm’s five-member IPC since 2017. Prior to his current role, he held a variety of positions, including Vice President of Portfolio Management Communications, Capital Markets Team Leader and Institutional Client Services Manager. Before joining the firm, he worked at Bear Stearns as a Corporate Finance Analyst in the Global Technology Group.
Michael regularly meets with clients globally, sharing the firm’s market outlook, current portfolio positioning and answering questions. He is the author of six books, including ‘20/20 Money: See the Markets Clearly, Gain Focus and Invest Better than the Pros’. He was also a lecturer at the Haas School of Business at the University of California, Berkeley, where he taught investment management topics.
Michael received his undergraduate degree from Claremont McKenna College and his doctorate in Depth Field Psychology and Mythology from Pacifica Institute.
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Disclaimer
The views expressed in this publication are solely those of the individual and do not reflect those of their employer organisation. These views should not be relied on as research or investment advice regarding any stock and are subject to change. There is no guarantee that any forecasts made will come to pass. Forecasts are subject to numerous assumptions, risks, and uncertainties, which change over time, and the individual undertakes no duty to update any such forecasts. International investing may involve risk of capital loss from unfavourable fluctuations in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations.
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