Tags: 2020 Elections | Healthcare Reform | kenfisher | medicareforall | 401k | stocks | invest

Ken Fisher: 'Too Early to Fear (or Cheer)' Dem Policies

an empty stage before the first 2020 democratic debate
The stage for the first Democratic debates for 2020. (AP Photo/Marta Lavandier)

By    |   Sunday, 14 July 2019 12:14 PM

An investment analyst is advising against overreactive responses to Democratic presidential candidates' goals on "Medicare for All" and doing away with private healthcare because you cannot know what the true market response will be, if it ever even comes to it.

"Many investors are nervous, fearing fallout for healthcare stocks," Ken Fisher of Fisher Investments wrote in the USA Today. "But it's too early to fear (or cheer) this — or any policy proposals that flash-forward this year. Slow down."

Fisher's warning came in an analytics piece headlined "Is 'Medicare for All' a health hazard for stocks in your 401(k)?"

"Setting aside all political views, if Medicare for All passed, health insurance and hospital stocks likely would suffer," Fisher wrote. "Possibly drug and medical device makers would too, although they are more insulated. Even if legislation doesn't pass, a heated debate could hurt sentiment, sparking volatility in these stocks. But you shouldn't think that way."

Fisher noted major governmental policy change takes a long time, giving former President Barack Obama's 2008 healthcare campaign as an example. The Affordable Care Act did not pass until 2010 or take effect until 2013.

"Markets barely blinked either time," he continued. "Healthcare reform campaign talk and tweets scared investors in 2016, also, but little changed. Any post-2020 changes will be similarly slow.

"Stocks don't really react to this kind of thing even though we commonly think they do."

Fisher added by the time the final policy changes are fleshed out, it could ultimately be "watered down from initial proposals," and  "would be a positive surprise, potentially boosting healthcare stocks."

Also, "markets move most on probabilities, not possibilities," he wrote.

"We're at least a year away from being able to assess the probability of Medicare for All happening," according to Fisher.

Any expectation of a Democratic takeover in government to push single-payer healthcare would merely be speculative too far out, he noted.

"For single-payer healthcare to become reality, the Democrats need comfortable margins in both chambers of Congress – plus a president supporting it," Fisher wrote. "Will that happen? I haven't a clue — no one does, really. Who knows who the Democrats will nominate. It's way too early."

An extreme candidate might also just have used a "Medicare for All" platform to get elected, only to moderate the views once in office, according to Fisher.

"Early big ideas aim to win over the party base in primaries," he wrote. "California Sen. Kamala Harris moderated on Medicare for All the very day after her debate. If you believe any Democratic victor would govern as they talked at the debates, there is some great Arizona oceanfront property you may like."

We are at least a year away from even being able to understand who the candidate or platform will be anyway, he added.

"You shouldn't start weighing any election's outcome and market impact until the summer before the vote," Fisher wrote. "We need presumptive nominees and relatively defined, state-specific, head-to-head details. We need a clearer sense of how the economy will look.

"And will Democrats choose an appealing campaign strategy for Midwesterners who swung 2016 to President Trump?"

This does not apply merely to healthcare stock speculation either. All of the big policy promises, including breaking up big tech, student loan forgiveness, free college, or new taxes can evolve if not completely disappear from the realm of possibility.

"So don't overthink them," Fisher concludes. "While rising election uncertainty may slow U.S. stocks' gains, the bull market grinds upward despite campaign promises."

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Politics
An investment analyst is advising against overreactive responses to Democratic presidential candidates' goals on "Medicare for All" and doing away with private healthcare because you cannot know what the true market response will be, if it ever even comes to it....
kenfisher, medicareforall, 401k, stocks, invest
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2019-14-14
Sunday, 14 July 2019 12:14 PM
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