Fisher Investments’ Time-Tested Investment Approach

The days of having to rely on cookie-cutter investment strategies are over. With Fisher Investments, you can have an investment plan tailored to your unique needs, along with top-tier client service. In this article, you will learn more about our approach to portfolio management, as well as the service and education we provide, which we believe are critical to helping our clients meet their financial goals.

Fisher Investments is part of the global Fisher group of companies.

Fisher Investments’ Approach: Built Around You

Why Personal Goals Drive Portfolio Decisions

Every investor has unique goals and circumstances, and a unique time horizon. At Fisher Investments, we take these differences into account from the very beginning of a client relationship. Going to these lengths to understand each client’s situation helps avoid generic investment recommendations. Our approach keeps clients’ personal investments in line with their real-life objectives, rather than some “expert’s” idea of what generally works.

What Fisher Investments Considers When Building a Portfolio

At Fisher Investments, we can tailor our investment strategy to each clients’ personal objectives and investment mandates. Other money managers may take an age-based approach or have clients fill out a basic questionnaire to determine an optimal asset allocation or investment strategy. At Fisher Investments, we take a comprehensive portfolio management approach. Our thorough information-gathering process considers a variety of factors to create tailored portfolios for our clients. Some factors we may consider when forming an optimal long-term investment strategy for a client include: investment objectives, time horizon, cash flow requirements, outside income and assets, tax considerations and more.

Fisher Investments’ Disciplined, Top-Down Approach

What Top-Down Means in Practice

There are two basic approaches to building and managing an investment portfolio: bottom-up and top-down. A bottom-up method places the greatest importance on picking individual stocks or other securities. In contrast, to address the daunting task of selecting from tens of thousands of securities globally, Fisher Investments employs a top-down investment process and leverages a large research team to help make sense of a complex and vast investment landscape.

How does the top-down investment process work? Imagine a cone-shaped funnel. At the top, we weigh economic, political and sentiment factors we believe will drive markets over the next 12–18 months. Based on those, we determine whether we believe investing in stocks, bonds, cash or other securities is most advantageous.

We don’t discount the fact stock selection affects returns. But we believe longer-term returns are impacted much more by higher-level decisions such as how much you’re invested in stocks versus bonds and category choices between the types of sectors and countries you’re invest in. A bottom-up stockpicker seeks a needle in a haystack; we target haystacks full of needles.

70-20-10 Investing Explained

Consistent with our top-down view, we believe approximately 70% of long-term portfolio returns are attributable to asset allocation—i.e., what mix of stocks, bonds, cash or other securities you own at any particular time. From there, 20% comes from sub-asset allocation, that is, how portfolio allocations are spread across categories such as country, sector, capitalization and valuation. Finally, contrary to what many believe, only about 10% of returns over time are determined by individual security selection.

A Flexible, Global Strategy

Keeping Up with Market Leadership

No one country, sector or investment style remains dominant indefinitely. If that were true, it would be easy to invest in only the top category. Instead, market leadership moves in cycles—not only on a country basis, but for styles and sectors too. Therefore, we believe investing globally is essential for protecting and growing your investment.

For example, looking at annual stock returns for the best-performing developed countries over the past 20 years, we see a wide array of leaders. And the US, despite being the world’s largest economy, reached the top three only six times.¹

Avoiding Domestic Market Concentration

We regularly find investors think companies local to them are best for their portfolios, while they view equities from other nations as risky unknowns. But this “home-country bias” can bring dangers of its own, heightening portfolio risk while missing out on global investment opportunities. This is because local indexes are typically narrower and more concentrated than investors realize. For example, the MSCI Germany stock index has only 53 constituents and is heavily concentrated, with Industrials and Financials making up over 50% of the benchmark.² Even the US, with the world’s largest stock market, has a strong tilt toward Tech at 37%.³ Generally, the broader an index is, the lower its volatility will be over the course of time. Therefore, a global stock benchmark will likely experience even less volatility than any single-country benchmark over time simply because the broader global approach helps offset the risk of steep dips or spikes tied to any single region or sector.⁴

How Fisher Investments Adapts to Change

At Fisher Investments, we believe flexible, active portfolio management can help investors benefit from shifts in market leadership, opening up additional opportunities while reducing risk. Our approach enables us to stay responsive and disciplined as market conditions evolve. Fisher Investments has a wealth of research and analytical resources to help inform how we position client portfolios for the types of stocks and bonds we expect to perform well over the next 12–18 months. Again, this is the 20% part of our 70-20-10 approach, in which we adjust the weightings of countries and sectors over time to align with our outlook. Our flexible approach is ongoing, meaning we make portfolio shifts when our analysis deems them necessary, not on a predetermined schedule.

We believe we can add value for our clients by leveraging unique market insights in our client portfolios. Fisher Investments actively manages portfolios based on identifying what we believe others are ignoring or misunderstanding about markets, as well as interpreting widely known information differently than others.

Experienced Leadership with Extensive Research Support

The Investment Policy Committee

The Investment Policy Committee (IPC) is the dedicated team that makes all strategic investment decisions for client portfolios. The IPC, which includes Ken Fisher, Jeff Silk, Bill Glaser, Aaron Anderson and Michael Hanson, collectively monitors global economic and market conditions to devise and implement the firm’s investment strategies with the support of the firm’s large research group. Together, the IPC members have over 175 combined years of industry experience.

Fisher Investments’ Research Capabilities

Our large, in-house Research Department aids the Investment Policy Committee with every step of the investment process. The Research Group is organized into teams focused on analyzing economic trends, assessing sector and industry developments, evaluating individual securities, calculating performance and implementing the IPC’s portfolio decisions.

The Fisher Investments Difference

A Long-Standing Focus on Client Goals

Since Fisher Investments was founded in 1979, our goal has been to help clients achieve their investment goals by putting their interests first. We believe our unwavering client focus and extensive investment capabilities have helped us successfully manage portfolios for over 45 years. We do things differently from other investment firms—not just to be different, but because it matters for our clients.

We designed our entire business to minimize conflicts of interest. We have a strong division of labor between our sales and service roles, allowing employees in each role to focus on their strengths. At Fisher Investments, our client service focuses entirely on providing superior service, not additional sales. And we’re continually looking for ways to improve so we can keep putting our clients first.

What Makes Fisher Investments Unique

As we’ve discussed in this article, we believe our approach to portfolio management and client service sets us apart. That includes:

• Personalized portfolios built around investor goals – We take the time to learn about clients’ unique goals and needs.
• A disciplined top-down investing approach – Our investment process starts by analyzing global economic, political and sentiment drivers to forecast market conditions and develop investment themes.
• Flexible active management – We adjust portfolios over time based on our market outlook.
• Global diversification – We seek to maximize opportunities and manage risk by investing globally.
• Fiduciary mindset – Fisher Investments is proud to be a fiduciary, which means we are legally and ethically required to put your interests first.
• Direct service and investor education – We offer communication tailored to your preferences, along with a wealth of resources on topics ranging from investing to financial planning.
• Transparent fees – We offer a simple and competitive tiered advisory fee based on your portfolio’s size. We’ve designed it to be easy to understand, and we believe it puts clients’ interests first.

Investment Management + Personalized Service

By making proactive communication an essential component of our management strategy, we’re better equipped to help clients understand what is happening with their portfolios and why. We’re proud to ensure all our clients have a dedicated service team who is familiar with their unique situation. This enables us to offer stability and support, no matter what the future has in store. Fisher Investments provides a wealth of educational resources, such as portfolio reviews, quarterly updates, market commentary, client events (both live and virtual), articles, podcasts, videos and more.

Support That Isn’t Built Around Selling Products

Fisher Investments separates sales, client service and portfolio management responsibilities, allowing our employees to build breadth and depth in their areas of expertise. We believe this division of labor reduces conflicts of interest and directly benefits our clients by giving them our undivided attention and care at every step of the relationship.

Discover How Fisher Investments Can Help You

To learn more about Fisher Investments’ personalized approach to portfolio management and see whether it aligns with your investing needs, contact us here or call us at 1 (888) 823-9566. We look forward to getting to know you and discussing how we can help meet your financial goals for many years to come.