Disclosure: Established in 1995, Fisher Investments Private Client Group is a division of Fisher Investments that offers money management services to qualified individuals on a separately managed account basis. All mentions of Fisher Investments in this article are in reference to their Private Client Group. Fisher Investments account performance analyzed for this article applies to Global Total Return modeled accounts that have no client restrictions. In addition to having clients in the US, Fisher Investments now also services clients in Canada, the UK and through an affiliate in Germany. Laws and Fisher Investments business practices may differ significantly outside of the United States. Therefore, this article may not apply to non US based investors. Also, Fisher Investments has grown in part through significant acquisitions. Fisher Investments may have different obligations towards clients obtained through such acquisitions and may handle such accounts differently. Furthermore, Fisher Investments clients that indicate lower risk tolerance or shorter investment time horizons may experience results or strategies which are significantly different from the ones discussed in this article. This article expresses opinions about Fisher Investments based on one client's short experience working with Fisher Investments as well as on analysis of the limited data available from public sources and directly from the company. Since Fisher Investments only offers services to qualified individuals, it is not subject to the same rigorous regulatory oversight and reporting standards (including daily pricing) as are the mutual funds. Fisher Investments denied requests for additional data, which would have allowed for a more thorough and direct analysis of their performance.

I would like to thank everyone for their comments to the original blog entry appearing in this space for inspiring me to write this full length feature story on Fisher Investments. A condensed version of this article is also slated for publication in the March issue of the newspaper.

Introduction: Fisher Investments is an independent money management firm with over $45 billion in assets under management. In existence since 1979, it first began offering money management services to individuals in 1995. Fisher Investments advertises widely on financial websites and is an amazingly well run marketing machine. Fisher Investments staff and marketing materials position Fisher Investments as the country's leading wealth money manager with stellar performance. CEO of Fisher Investments, Kenneth Fisher is a son of the legendary investor and author of Common Stocks and Uncommon Profits, Philip A. Fisher. Ken in his monthly column in Forbes magazine, picks stocks among random musings on the state of the economy. Some years these stock picks have done reasonably well, however, according to Ken Fisher's January 2008 column in Forbes, 2007 was not one of those years, with his stock picks yielding less than a 1% return. Turns out that just like their boss, Fisher Investments also fails to impress with consistent performance. In fact, analysis of Ken Fisher and Fisher Investments money management strategy, style and stock picks yields surprising results.

Background: I was expecting a baby, didn't have the time to manage money on my own, had previously considered using Fisher Investments, which was now also recommended by a trusted friend, who recently started using them. After doing some checking on the Internet and asking around, I decided to give them a try. I sold off various assets and transferred cash to Fisher Investments discretionary accounts at the custodian that Fisher Investments designated for me. All agreements were signed and accounts were 72% funded by December 19th. The other 28% of the funds hit the account on December 27th. Fisher Investments went to work right away, investing approximately 1/6 of the total on December 21st, 24th, 26th, 27th and January 3rd and 4th. Very quickly I realized that Fisher Investments ideas of what constitutes a good investment did not match mine and I attempted to fire them on December 28th. They managed to convince me to stay on, but made no purchases on the four trading days between December 28th and January 2nd, as the result. In the meantime, I requested that Fisher Investments send me monthly historical performance data in electronic form, so that I can have some chance to analyze it and get a better idea of what I can expect in the future. I was told that such information was not available to clients and that quarterly data was being sent to me by overnight delivery. I was unimpressed, judging their quarterly performance data to be inconsistent vs. the MSCI World Index, which Fisher Investments uses as the benchmark. This coupled with unresponsiveness to my data requests confirmed my prior decision. By the morning of Monday, January 7th, I canceled my agreement with Fisher Investments and quickly moved my accounts from the Fisher Investments designated custodian to another brokerage. Being busy with the imminent birth of a child (she arrived on Friday, January 18th), I put these matters aside for the next three weeks... When I came back to look at my accounts over the last weekend in January, I was surprised to see that the ones built by Fisher Investments declined significantly more than the indexes. This motivated further research culminating in this article, which I sincerely hope will help others determine whether Fisher Investments is the right choice for their money management needs.

Fisher Investments Basics: Fisher Investments traders use sophisticated software to route buy and sell orders to brokerages. Each security's daily average per share execution price is assigned to the affected client account's transactions at the end of the trading day. For this reason, clients can see the day's transactions only after US markets close and never in real time. Fisher Investments accounts are fully discretionary, which means that at any time Fisher Investments may buy or sell any security that they believe will benefit clients. Clients, however, are able to direct Fisher Investments to not buy or not sell certain stocks, or stocks in certain industries. Beyond this and other items listed in the disclosure, Fisher Investments intends for all accounts to be the same at all times, with neither consideration given to the date when each account was first set up, nor the cost basis of securities in each of the accounts. It makes sense that each customer should equally benefit from Fisher Investments "best ideas." However, this simplistic approach fails to recognize that some positions in current clients' portfolios are neither "buys," nor "sells." For example, if Fisher Investments should decide that a certain account position must be reduced over a given time period, clients starting with Fisher Investments over that time period would instead see this position added to their accounts. By ignoring "holds" Fisher Investments appears to simplify their work, but may compromise performance of their clients’ portfolios.

Purisima fund: In addition to being the CEO of Fisher Investments, Kenneth Fisher also manages Purisima Total Return (PURIX) mutual fund, which, just like the Fisher Investments accounts, is benchmarked against MSCI World Index and which, incidentally, according to Morningstar as of February 15th, 2008 lags behind both that index and other funds in the category for average 3 and 5 year performance. There are claims circulating on the Internet that PURIX and Fisher Investments accounts are the same. Of course, to verify this unequivocally would require cooperation from Fisher Investments, which we have not been able to obtain. Nevertheless, we can get sufficiently close by simply looking at the data. At the time when we parted company, Fisher Investments had 69 positions in my account. Of these, 46 were also PURIX top 55 holdings from over a month before! (This, according to the latest publicly available information from a 1/29/08 PURIX filing. Also, these 46 holdings accounted for more than 61.6% of that fund's value on 11/30/07.) In addition, there are only small differences in annual performance between PURIX and Fisher Investments accounts, with PURIX beating Fisher Investments Global Total Return by 0.7% a year on average. Such small performance differences could, potentially, be explained by the differences in fee structures. In any case, that these two sets of annual performance numbers correlate 99.85% with each other and far better than either of them correlates with the MSCI World Index for the ten years from 1997 to 2006 is hardly an accident. This data leaves very little doubt that even if not identical, Purisima Total Return (PURIX) mutual fund and Fisher Investments accounts are at least identical twins.

(Please note that I did not have full year 2007 performance numbers to use in this article. Those of our readers who have read Ken Fisher's latest book, The Only Three Questions that Count, probably noticed Fisher Investments account performance numbers published in Appendix K. If they had also looked at the PURIX fund prospectus, they would have noticed that the two sets of performance numbers look nothing alike. The only reason for this is that the performance numbers, as published in the book (but not in the prospectus) are for the years ending on June 30th, instead of December 31st, as is customary in the industry. We expect that many of Ken's book readers missed the small print explaining this fact and would have been mislead as a result.)

Recent Performance: Accounts that were built for me by Fisher Investments declined 11.8% from the market close on Thursday, December 20th, 2007 to the the market close on Friday, January 25th, 2008. (As a point of reference, consider that MSCI World Index declined only 7.6% and thesmaller account I built on my own, suffered a much milder 5.1% decline over the same time period.) Many positions were near their 52 week highs and trading at relatively high P/Es at the time when Fisher Investments added them to my accounts. Fisher Investments investment counselor, John said that my portfolio was built to be balanced between growth and value stocks and that I should trust them to do their job. However, even the best growth stocks don't always trade at their yearly highs and I would think that the best time to buy them would be after they correct and not before. In any case, Fisher Investments best performing stock pick was up less than 4%, while the worst - down almost 35% from December 20th, 2007 to January 25th, 2008. The 5 largest individual stock positions, representing approximately 13% of the initial total, were down over 19%. But the smallest 5 positions, representing approximately 3.5% of the initial total, were down less than 9%. It is rather doubtful that if I had allowed Fisher Investments to continue managing my accounts, the above described situation would have been appreciably different. These trends started to emerge right away and when I asked my Fisher Investments investment counselor about them, the only answer I received was that short term performance results are irrelevant. However, good long term results can only come as a result of consistently performing well in the short term. The only plausible explanation I could find for such poor performance in such a short period of time was that while Fisher Investments may be fine at asset allocation, they appear to be rather poor at picking individual stocks and setting appropriate buy and sell limits for the stocks they select.

Further qualifying the validity of performance numbers on January 25th, as I quoted them above is the following. Before I signed the last of the account paperwork in the middle of December I was very concerned that at the start of the year Fisher Investments would quickly change their mind and sell what they had just bought. My Fisher Investments investment counselor assured me that repositioning for the new year had already taken place. Earlier, Pam, a Fisher Investments Denver area sales person had quoted their portfolio turnover rate at around 20%. Thus, I could expect that Fisher Investments would have changed at most one position out of the 69 between January 7th and January 25th and that would have made virtually no difference on performance.

Also, since it appears that we can reliably use PURIX performance as a proxy for Fisher Investments performance, let's take a look at how it did over the same time period. Turns out that PURIX lost 9.5% of it's value from its close on December 20th, 2007 to the close on January 25th, 2007, with most of that loss (8.3%) occurring between January 7th and January 25th. However bad, that is still 2.3% better than the 11.8% loss my account experienced. The difference is explained by Fisher Investments purchasing securities not at the closing price on December 20th, 2007, but at prices (excluding commissions) on average 2.15% higher. Adding to that approximately 1/4 % spent on buy-in commissions and PURIX results match those achieved on my account to within 0.1%. Furthermore, the timing of the tail end 8.3% loss by PURIX, matches that of my account rather well.

The "Fisher penalty": Why did Fisher Investments have to spend on average 2.15% more to buy positions for my account than their closing prices on December 20th, 2007? Financial markets were in a general down trend over that time period. Fisher Investments investment counselor insisted that this was just a coincidence and that they have recently made changes in the way they transact, to make sure that they are not influencing market prices with their actions. Assuming no wrongdoing, the only reasonable explanation I could come up with for this "Fisher penalty" is that  Fisher Investments, by making large transactions on behalf of many clients simultaneously significantly impacts supply and demand of the transacted securities. For example, according to Fidelity Investments, as of December 31, 2007, Fisher Investments owned 17.24% of all outstanding shares of Ishares MSCI Japan Index Fund (EWJ). The next largest EWJ holder was Goldman Sachs with only a 2.34% stake. According to Yahoo Finance, the average daily volume for EWJ is under 23 million shares, yet Fisher Investments controlled about 6 times that many shares. Now, consider what would happen if Fisher Investments reduced their clients' exposure to EWJ by say 1/3 in a single day.

Exchange Traded Funds (ETFs): ETFs are essentially mutual funds that can be traded on exchanges, just like stocks. Fisher Investments allocated 8.5% of my portfolio not to individual stocks, but to four ETFs. Two of these were by far the largest positions taken out by Fisher Investments on my behalf. Fisher Investments account representative claimed that this was the most cost effective way to build my portfolio. However, each of these funds has their own management expense and three of the four were not in Emerging Markets. Of course, it would be cost prohibitive to take out miniscule positions in each of the underlying securities directly. However, that's hardly necessary and purchasing the best stocks included in each of the ETFs would yield better results. Of course, identifying which individual stock will perform best is a more difficult job to do. But that's why clients hire money managers in the first place!

World stocks - US markets: Roughly half of all the individual stocks purchased for my portfolio by Fisher Investments were American Depository Receipts (ADRs) and American Depository Shares (ADSs), which represent ownership in the shares of a foreign company, but trade on US exchanges. No securities were purchased directly on any foreign exchange. Fisher Investments client service representative told me that the reason Fisher Investments purchases ADRs and ADSs instead of the underlying securities is that it is the most cost effective way for their clients to own these companies. That may well be, but there are also many more worthwhile foreign companies that do not trade on any US exchange and owning shares in some of these could greatly benefit Fisher Investments clients. Filtering out foreign companies simply on the basis of them not being available on US exchanges, appears to defeat the goal of going international.

The Pink Sheets: The "Fisher penalty" would be even larger on low trading volume positions, such as the 5 Pink Sheets ADRs/ADSs that Fisher Investments included in my portfolio. These were actually purchased for my account at an average of 3.79% above their December 20th closing prices! No wonder. As of December 31st Fisher Investments controlled almost 5 million shares of the Pink Sheet traded BASFY, almost 5 times as many as the next largest holder, and about 80 times this Pink Sheet's average daily volume. Another one of the Fisher Investments Pink Sheet favorites, FJTSY, on average trades about 11 thousand shares a day, yet Fisher Investments controlled more than 2.5 million shares of it as of December 31st. Yet another one, CHEUY trades under 130 thousand shares a day, yet Fisher Investments controlled almost 17 million shares of it. Some days, these stocks have zero volume and on other days, much of their volume should be coming from Fisher Investments transactions. That would make them rather illiquid and their true market price, difficult to ascertain. So, why does Fisher Investments like these Pink Sheets enough to pay a larger premium for them? The most likely explanation is that it is far easier for Fisher Investments to deal with these Pink Sheets, than with the underlying securities trading on different continents, in different time zones, in different currencies, subject to different laws and perhaps even requiring different software to transact. So, who cares that it negatively impacts portfolio performance in the short term? It is a small price to pay for owning stock in such great companies and long term it will not matter, or so Fisher Investments would like you to believe.

Diversification: Out of the 69 total positions that were purchased for my accounts by Fisher Investments, the largest individual stock position was just over 3% of the portfolio, the smallest about 0.5%. Fisher Investments says that they put a large number of positions in every portfolio in order to properly represent the world / industry allocations that they are targeting. Of course, another good reason for diversification is that it tends to reduce volatility when the various components are weakly correlated and ensures that a single bad pick is not disastrous to overall portfolio performance. But while a 0.5% position in a large cap stock makes sense for an index fund and large actively managed mutual funds, adding it to relatively small actively managed separate accounts seems rather pointless. It is virtually guaranteed to not significantly impact portfolio results. Aggressive diversification with smaller accounts increases costs and appears to say that Fisher Investments is afraid to be wrong and thus is not willing to make any big bets on any specific individual stocks.

Dollar-cost averaging: Fisher Investments Client Owner Manual claims that dollar-cost averaging generates lower returns on average than the lump sum approach. Long term, markets do go up, so there is no doubt that given a statistically large number of investors acting over a long period of time, on average they will achieve better results with lump sum investments. So why is dollar-cost averaging being religiously preached by most of the industry gurus? Shorter term markets can and do turn bear for months and even years at a time. Investment legend of our time, Warren Buffet, when asked about his secret for success, said that he only has two rules. "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." Nobody can reliably predict when the next bear will roar and for how long. Accidentally investing a lump sum at a market peak can lead to a financial disaster, while dollar-cost averaging can reduce the risk of a large loss. In any case, Fisher Investments would not dollar-cost average and it is too early to tell whether Fisher Investments lump sum approach would have worked out in my case. However, with the market down significantly in January, so far, it looks highly unlikely.

The world of change: Lately, when looking at longer term performance results I have been breaking them down and looking at performance before 2001 very differently from the way I look at the more current numbers. There are numerous good reasons for doing this. Globalization, political and economic changes made the world we live in much different from only 10 – 15 years ago. Foreign markets have emerged where none have existed before. Just consider the BRICs (Brazil, Russia, India, China) - these markets only really became accessible after the turn of the century! In the 1990s, US economy was strong (and the only one that mattered, at least for those of us living here), budget deficit seemed to be under control, US dollar was strong too and spirits high, as the dot com boom churned out new millionaires daily. All that changed in what now seems like a flash. In reality it was a long and natural chain of events that culminated in 2001 with the tech bubble having just burst, US inaugurating the newly "unelected president," who wasn't nearly as charming as his predecessor and thus unable to keep the eyes of interns and the world focused on matters of less than global importance. And then finally the shock of 9/11. Only five short years later, according to World Bank, US economy constituted less than 20% of the world's (in international dollars). According to a recent newsletter article I read, Standard & Poor’s 500 Index companies today derive 49% of their revenue from foreign markets and that’s up from just 30% in 2001! In the meantime the US dollar declined precipitously against most other foreign currencies. It certainly is a different world that we live in now. These days to measure portfolio performance we can not rely on the old worn out tape measure with inches barely showing. We must replace it with a brand spanking new technologically advanced "made in China" metric device. This is why I measure portfolio performance against the S&P 500 Index prior to the turn of the century and against MSCI World Index for the more recent time period.

Long Term Fisher Investments Performance: (Note: Fisher Investments did not provide me with performance data beyond Q3 of 2007.) Fisher Investments cumulative results from 1995 to Q3 2007 look good vs. both the MSCI World Index and the S&P 500 Index. However, this is but one way to measure performance. Let's dissect and consider other starting and ending points, for one never knows where along the performance curve a  particular investor will enter. This more granular approach to analyzing the data will also provide further insight into Fisher Investments strengths and weaknesses. As we have already mentioned, the world was of little consequence to US investors in the 90s. Back then hardly anyone paid attention to the MSCI World Index and S&P 500 Index consistently outperformed it every quarter (except one) from at least the start of 1995 to the middle of 1999. Performances of the two indexes flipped flopped over the next four years until a new clear winner the MSCI World Index emerged in the second half of 2003. Since then it has consistently outperformed the S&P 500 Index. Of course, index performance is only a reflection of the changes taking place in the world and those who paid attention, by the time 2001 rolled around, already knew that "the world" could no longer be ignored. Kenneth Fisher, was certainly one of those in the know and this can be plainly see through the prism of his articles in Forbes. This makes for an even stronger case for measuring Fisher Investments performance against the S&P 500 before the turn of the century and against MSCI World Index after.

Fisher Investments did reasonably well in their first 6 years of managing individual investors money, growing their clients accounts by 197.4%, but they lagged behind the S&P 500, which returned 219.4% over the same time period. Then in 2001, Fisher Investments pulled nothing short of a miracle: they timed the market and won, turning in 3.2% return in the year when virtually every index and mutual fund produced double digit losses. This amazing feet earned Fisher Investments recognition and high accolades throughout the financial world. Yet, even these miraculous results fell short of one of the Fisher Investments goals for bear markets, as stated in their Client Owner's Manual, to "beat cash and perhaps fixed income alternatives." In any case, they were not able to repeat this performance the following year, instead underperforming both the MSCI World and the S&P 500 Index in 2002. In fact, according to the Fisher Investments quarterly data, over the last six years from 9/30, 2001 to 9/30, 2007 Fisher Investments accounts gained 58.4%, lagging behind both the S&P 500 Index gain of 63.1% and the MSCI World Index gain of 95.1%.

Fisher's darkest 5 months: When I evaluate mutual funds' past performance, in addition to the usual parameters, I also like to see how they did during the most difficult times. It is no different for private money managers, like Fisher Investments. For Fisher, as for so many others, the worst annualized performance in absolute terms came as the technology bubble deflated in 2002. From the charts Fisher Investments provides, it is apparent that in the five months from the beginning of May to October, Fisher Investments Global Total Return clients lost more than 30% of their account values. Certainly not the kind of performance I expected from the "best money manger" under any circumstances. But how does this compare with performance of mutual funds I gave up in moving to Fisher Investments, with Ken Fisher's PURIX and it's world fund competitors? The table below shows mutual fund performance during the darkest five months of 2002 and from December 20th, 2007 to January 25th, 2008.

* Estimate, precise data for the exact time period in the table is not readily available.
** American Funds EuroPacific Growth, the best performing non money market fund of the group, during the most recent market decline, didn't exist until June 2002.

In the 2002 time frame, Kenneth Fisher's PURIX fund decidedly stands out as the group's laggard, while the leader of the pack is the Morningstar five star rated Fidelity Contrafund (FCNTX). A closer look shows that Contrafund is one of the very few funds that long term and consistently has been able to achieve Fisher Investments' top two goals for bear markets, as spelled out in their Client Owner Manual: 1) reduce risk consistent with portfolio theory and 2) beat the equity benchmark. Fisher Investments doesn't always have problems achieving these goals. However, they have not been able to do so consistently and 2002 is just one example, when they have failed especially badly.

Modern portfolio theory: So, what does it mean to reduce risk consistent with portfolio theory? Modern portfolio theory postulates that risk is closely related to volatility. It defines a measure known as the portfolio's Beta (β) coefficient, which is portfolio's volatility relative to an appropriate index multiplied by the correlation of the portfolio to the index performance. Risk free returns (i.e. treasury yields) during the time period are usually subtracted from both sets of numbers before making the calculation. The theory also defines an Alpha (α) coefficient as the risk-adjusted measure of portfolio's "excess return" over the index. This makes α a good indication of portfolio manager's effectiveness. Using this nomenclature, a β of less than one indicates a portfolio, which is less volatile than the market represented by the index, while β of greater than one reveals a more volatile portfolio. Also an α of greater than zero, indicates that the actively managed portfolio's return is that much better than could have been expected simply based on the amount of risk assumed by portfolio's manager, while a negativeα suggests that you should perhaps look for a more talented manager.

Google Finance provides these standard parameters for most mutual funds. Fidelity's Contrafund sports a β coefficient of less than one for 3, 5 and 10 year time frames, while also showing a respectable α coefficient, beating expectations by 1.44% over the past three years, 4.27% over 5 years and 4.64% over 10 years, on average. One yearβ for this fund indicates 16% above market risk, higher than it was historically, indicating that the manager felt it prudent to take additional risks over the past year. Looks like he was right in doing so, as his strategy brought even higher returns to the fund holders, beating expectations by 9.66%. Now, let's see how this compares with Purisima Total Return fund, which we are using as a proxy for Fisher Investments performance. The 10 year β for PURIX is quite comparable to FCNTX, however its α, while still very good, is considerably lower, beating expectations by only 2.10% a year on average. Things get significantly worse for PURIX over 3 and 5 year time frames, when the fund assumed close to market risk only to produce an α of -2.98% over 3 years and -4.65% over 5 years. Over the past year PURIX assumed slightly above market risk and produced returns 0.58% above expectations. (Thus over 10, 5, 3 and 1 years FCNTX beat PURIX based on cumulative risk adjusted returns by 28.5%, 53.3%, 13.9% and 9.1%, respectively.) Note especially large discrepancy in five year returns. In large part it is attributable to PURIX sub par performance in 2002 and the stellar performance by FCNTX over that time period. Indeed, this is probably the reason that PURIX currently has the lowest five year risk adjusted performance of all the funds in our table, including the one star Morningstar rated Nicholas fund!

When I told my Fisher Investments investment counselor that I expect any money manager that I hire to build and manage a portfolio that has a β coefficient of less than one and an α coefficient greater than zero he sneered "and where are you going to find that?!" Well, that's what people hire money managers for - to consistently get them better than market returns with lower than market volatility. If a Fisher Investments investment counselor doesn't even realize that this is possible, I better stick with a mutual fund like FCNTX, which has consistently done exactly this for years, or go to an index fund or look for another money manager that can deliver the alpha that I seek!

Fisher Investments Advisory Fees: Fisher Investments standard fee for clients with $500,000 - $1,000,000 in assets under management is 1.25%. This is 0.25% above what appears to be the industry standard for this size accounts. Nevertheless, it would still be reasonable had it not been for rather poor past performance implied for Fisher Investments accounts by the above analysis, the "Fisher penalty" previously discussed, the higher relative commission costs for smaller positions and perhaps most importantly, availability of viable lower cost alternatives. Also, in what appears to be a rather unusual move, Fisher Investments starts the fee clock from the date of account signing, rather than from the date they begin trading in your account. Be aware that in some cases a significant amount of time may pass between these two dates. Fisher Investments sales people may assure you that if it takes "too long," they would change the effective date. To help avoid problems down the road, you should get such promises in writing.

Fisher Investments contracts specify an early termination fee of $1,000. These contracts also have a clause: "Any and all Advisory Fees paid to FISHER will be returned to the Client if this agreement is terminated during the first (30) days." However, Pamela, a sales person at the Denver office previously confirmed that Fisher Investments does not levy this fee and it is only written into the contract to deter people from abusing Fisher Investments. She also confirmed that the early termination fee is considered to be an advisory fee for the purposes of the above clause. That didn't stop Fisher Investments from attempting to collect $1,000 from each of my two accounts, which according to additional documents I signed were to be managed as one. The only reason they did not succeed in collecting the money directly from the custodian, was because I switched custodians immediately after canceling with Fisher Investments. They persisted by sending me bills, which I promptly sent back to them with short notes.

Conclusion: Despite their claims to the contrary, Fisher Investments appears to be too large of an organization to give each client the personalized account servicing they deserve. Apparently, instead of concentrating their efforts on first rate stock research and implementing stock trading strategies to benefit their individual client needs, Fisher Research uses their massive resources to build and maintain a well oiled, flashy and bureaucratic marketing machine that functions similar to a worldwide mutual fund, but with less regulation, higher expenses and less predictable results than low cost mutual funds. Fisher Investments has delivered mediocre results for their clients throughout the 13 year history of their Private Client Group. A big exception to this was their amazing call to stay out of the market and/or hedge in 2001. As a result of that call they also missed the steep market decline immediately following the tragedy of 9/11. Those who believe in miracles and truly think that Fisher Investments will be able to time the market around the next disaster, I recommend sticking with Fisher Investments. The rest of us will likely be better of going with a more consistent money manager. People with nontaxable retirement accounts and with smaller taxable accounts, should also consider investing in a low cost Mutual Fund, such as the Fidelity Contrafund, which by consistently beating indexes, outperformed Fisher Investments over the past ten years, without resorting to market timing.

Other suggested readings on Fisher Investments:

Business Week: Hype From A Financial Guru?
The Wall Street Journal: Define Aggressive: Fisher Sales And Marketing Practices
CNN Money: Fisher sues Wachovia for sales exec hire
Reuters: Fisher Investments sues former employees
Investment News: Fisher Investments eyes a centralized roll-up
Guru Focus: Kenneth Fisher
Purisima Total Return Fund (PURIX) Prospectus

PR Log: Fisher Investments Strikes Against Former Client - a Newspaper Publisher

The Wall Street Journal: How Fisher, Ex-Workers Handle Divorce - Money Manager Sues Its Former Employees Over Data on Clients
Salon.com: Are we too gloomy about the economy?