Fisher: Bet On An Un-Average Second Half

Stocks are on track for a pretty average year. But Kenneth Fisher says to expect a well above average second half.

“Average returns aren’t normal,” Fisher says in his latest Forbes column. “Normal returns are extreme (only when they are blended do we get ‘average’). People may expect average, but they’ll rarely get it.”

Fisher says that in the S&P 500′s lifetime the index has been in the red 27% of all calendar years. It’s risen more than 20% in over half the positive years. “In other words, if you don’t get a down year, history favors huge!” he says. “Years with positive returns up to 10% — what most folks usually expect (“average”) — happen only 15% of the time. More frequent (amazingly): years between 30% and 40%. Markets love to surprise. They’re extreme.”

As a year progresses, Fisher writes, “slowly folks become ever surer of a moderate end point, which often morphs to a melt-up surprise. Bet on it.” He offers a handful of stock picks, including Aflac (AFL).

Kenneth Fisher