Ken Fisher: Always Prepare for Volatility Ahead
Ken Fisher discusses recent market volatility triggered by the Iranian war, explaining it fell short of a formal correction. He outlines his 2026 market forecast, predicting a sideways first half followed by a stronger advance in the second half. Fisher emphasizes that volatility is a permanent, unpredictable feature of stock markets.
Summary
Ken Fisher opens by addressing the market downdraft caused by the Iranian war, noting that while it created noticeable turbulence, it did not reach the threshold of a formal stock market correction. He defines a correction as a broad market index decline of more than 10% but less than 20%, and explains that declines below 10% are simply considered normal short-term volatility and noise — which is what the Iranian war event produced.
Fisher then broadens the discussion to the nature of stock market volatility itself, asserting that regardless of the timeframe examined, more volatility is always a high-probability outcome. He distinguishes between two forms of volatility: upward moves, which he calls 'pleasant volatility,' and downward moves, which he calls 'unpleasant volatility.' He stresses that the timing of market drops is fundamentally unpredictable and can be triggered by real events, fictitious narratives, or entirely unfounded fears.
Finally, Fisher shares his specific market forecast for 2026. He predicts that the first half of the year will be characterized by a 'begrudging sideways' movement — pulsating and uncertain, but without a significant upward or downward trend. He expresses more optimism about the second half of 2026, anticipating a more meaningful market advance. He closes with a core message: investors should always remain prepared for volatility, as it is an inherent and unavoidable characteristic of equity markets.
Key Insights
- Fisher argues that the Iranian war produced a market decline that did not qualify as a formal correction, since it fell below the 10% threshold and therefore represents only normal short-term noise.
- Fisher defines a stock market correction specifically as a broad market index decline of more than 10% but less than 20%, distinguishing it from ordinary volatility below that level.
- Fisher claims that volatility is a high-probability certainty in all timeframes, framing both upward and downward price movements as two forms of the same inherent market characteristic.
- Fisher argues that market corrections can occur based on entirely fabricated or unfounded fears — what he calls 'phony baloney fears' — with no real connection to actual events.
- Fisher's 2026 forecast predicts a begrudging sideways market in the first half of the year, with a more meaningful advance expected in the second half.
Topics
Transcript
[0:00] The Iranian war, as you know, created a downdraft in the market that was not quite big enough to be classified as a normal stock market correction. Normally, a correction is thought of as a decline in the broad market indexes of more than 10% but less than 20%. A less than 10% decline is just thought of as normal short-term volatility and noise, and that's what the Iranian war generated. Having volatility like that is not abnormal. Stocks are volatile. [0:33] So, is there likely to be more volatility ahead? You pick the timeframe, the answer is yes. Volatility is a high probability in all timeframes. Fact is, stocks are volatile. And the rise that's volatility of the…
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