Why Ken Fisher Says 'Capital Preservation' Could Cost You Big In Retirement

Legendary investor Ken Fisher has a message for retirees and those planning for retirement – the allure of "capital preservation" might be setting you up for financial disappointment.

Fisher, known for his no-nonsense approach to investing, argued in a New York Post opinion report issued on Monday that the concept of capital preservation – often touted as a haven for retirement savings – is fundamentally at odds with the growth needed to sustain a comfortable retirement.

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“Growth and true capital preservation can't coexist in the short run,” Fisher explained. He said that what many consider "safe" investing strategies often fail to keep pace with inflation, potentially eroding purchasing power over time.

The center of Fisher’s argument lies in the role of market volatility. While many investors view volatility as a threat, Fisher sees it as essential for long-term growth. He said that historically, U.S. stocks have risen in 63.1% of calendar months and 73.5% of calendar years from 1925 to 2023.

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“Eliminate the [downside] and the [upside] also disappears,” Fisher said. He argues that attempts to completely avoid market fluctuations typically result in ultralow returns, barely outpacing – or even trailing behind – inflation.

The investor aimed at financial products promising growth and capital preservation, calling them "phony."

"Investment strategies promising both growth and capital preservation are phony baloney," Fisher opined. "Yet so many vendors in varied forms – especially in rocky times like this summer's – claim otherwise, peddling poor products destined to disappoint.

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He warns investors to be particularly wary of insurance-like “buffered” funds and any product claiming “upside with no downside.”

Instead, the investor is advocating for a clear-eyed approach to retirement investing. He urges investors to understand that short-term volatility is the price of admission for long-term growth. For those who can’t stomach market ups and downs, he suggests reevaluating financial goals, savings rates and future spending plans.

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The veteran investor’s advice comes when many retirees grapple with economic uncertainty and market turbulence. While the desire for stability is understandable, Fisher’s message is clear – playing it too safe could cost you big in the long run.

As retirement horizons lengthen and the cost of living continues to rise, Fisher’s perspective offers the insight that there are no guarantees and that pursuing growth often requires embracing, rather than avoiding, market volatility.

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