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

Chapter 10. 1993: A Taxing Year

"In setting your cerebral scales to balance between bullish and bearish, never let your views of government, positive or negative, be more than about 10% of the weight of your thinking. Other things should weigh heavier, always."

—"The Clinton Factor," May 10, 1993

"What distinguishes highly successful investors from everyone else is what the smart ones don't do as much as what they do. Really sharp investors don't get sucked in by the trend du jour."

—"Four Don'ts and Some Dos," December 20, 1993

Nineteen-ninety-three was an average year in the stock market. Literally. The S&P 500 returned 10.1 percent on the year — almost exactly the stock market's long-term average, which is quite unusual. Most years, market returns are extreme — up big, up bigger, or down — and far from average. But the year wasn't average for all stock categories. Large US stocks lagged in 1993, hence the S&P 500's middling returns. The Value Line Index — heavily weighted to smaller stocks — jumped 18.1 percent.^[35] And foreign stocks did even better, rising 32.9 percent.^[36]

Newly elected President Clinton took office in January, ushering in an era of "Clintonomics." Hallmarks of President Clinton's new economic plan included higher corporate, income, and fuel taxes — enacted in 1993 — and NAFTA, the North American Free Trade Agreement, signed in 1993.

Remaining politically agnostic is essential in investing. Biases in general lead to poor investment decisions. Political biases are ...