The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

Chapter 2. 1985: A 30% Yawner

"Most of the mistakes I have made in my career have come from trying to tackle something too complicated. The successes have all been simple and well within my grasp."

—"Don't Be Too Smart for Your Own Good," July 1, 1985

"Here is the key to why stocks have done better than other investments through the decades. As the world changes, gold doesn't change, bonds don't change, real estate changes hardly at all. But a company can and must evolve, little bits at a time, year to year, forever—or die. If it can evolve to conform to a changing world, it will prosper and grow. The more successfully it evolves, the faster it grows."

—"Emulating America's Richest," October 28, 1985

Almost a mirror image of 1984, 1985 was a humdrum year with stellar stock market returns. Sure, 1985 saw the Plaza Accord signed by the US, UK, France, West Germany, and Japan to stem the rise in the US dollar. Microsoft released Windows 1.0. And New Coke launched, then thudded. But global events were generally mundane—except stocks. Stocks like boring because it means there's less for investors to worry about—as evidenced by this boring year with a big 31.7 percent S&P 500 return.^[6] Even those outsized gains were bested by foreign shares—rising 56.7 percent.^[7] That made one of Ken's main 1985 themes fitting: Keep investing simple.

In Ken's view, as shown this year, investing needn't be complicated. In fact, the more complicated you make it, the worse the results can be. Too often, investors ...