Ken Fisher Explains Why Upcoming Midterm Elections Likely Result in More Political Gridlock

Note: Fisher Investments is politically agnostic. We favor no political party nor any politician and assess developments for their potential market and economic impact only.

Fisher Investments founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher notes many investors are concerned about how 2022 US midterm election results might affect stocks. Ken has long believed political gridlock benefits stocks because it mitigates legislative risk—essentially reducing business uncertainty. While it is impossible to predict election outcomes, Ken believes 2022’s midterms further entrench gridlock.

Ken notes the president’s party historically loses congressional seats in midterms. Further, 2022’s midterms parallel redistricting, which Ken believes could favor Republicans. Finally, Democrats’ razor-thin congressional margins—the slimmest since the 1890s—mean they can’t afford to lose more than five seats to keep their House majority. Ken believes the most likely outcome is Democrats lose the House majority, which should translate to traditional political gridlock as opposed to the intra-party flavor we’ve experienced in the past year.

Either way, Ken believes gridlock—whether traditional interparty or more recent intraparty flavor—is likely to persist throughout President Biden’s term, which should bode well for stocks.

For more of Ken Fisher’s thoughts on the markets or retirement, visit us at https://www.fisherinvestments.com/en-us.

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