NEW YORK (TheStreet) - Investing with the herd can get investors into trouble, by buying into an asset or stock right near the top before an inevitable pullback. But investing with the anti-herd, or those that are purposely contrarian for the sole purpose of taking the opposite side, can lead to just as much demise.
The key for investors is to find a sweet spot in between, according to Ken Fisher, founder and CEO of Fisher Investments and author of "Beat the Crowd."
In today's world, there's so much media content, ranging from television to the Internet, that it's hard for there not to be a herd mentality when it comes to stocks.
Look at 2014 as an example. Almost every pundit started off the year saying investors should stick with U.S. equities and avoid international stocks.
However, as Fisher points out, that logic became so extreme headed into the end of the year, that it's completely backfired. International stocks and emerging markets have vastly outperformed U.S. equities in 2015, he said.
While the S&P 500 is roughly 1% away from its all-time high, it's still up less than 2% on the year, while emerging markets and European stock indices are up double digits.
Investors need to look for things that aren't so apparent to other investors. Fisher pointed to another example that relates to the political environment.
In the fourth quarter of an election year and the subsequent next two quarters, the U.S. stock market is positive 86.4% of the time, he explained.
That's vastly better than the returns compared to the rest of the time for stocks.
Fisher also says investors can take advantage of different stages in a bull market. For instance, companies with thin margins tend to do best in the first half of a bull market, whereas companies that have fat margins tend to perform better in the second half, he concluded.