The old saw “never short a dull market” proved it had teeth in August. August was a dull month: The VIX Index (a measure of implied volatility in S&P 500 stocks) traded near an all-time low, and for the month, the S&P 500 rose 0.1% while our stock-market-focused quantitative Global Quant portfolio rose 0.6%, Aggressive Growth rose 0.2%, and our Growth portfolio rose 0.1%. I don’t expect September, or for that matter the rest of the year, to be quite so easy going, but I suspect our portfolios will continue to show relative strength. Right now, our income-oriented portfolios are faring very well. They are benefiting from an environment that continues to surprise the people who told you to sell your bonds and bond funds at the beginning of last year and this year, but which hasn’t surprised me. Read more
As anticipated, the Fed did not raise rates, but did leave the door open for one more rate hike this year (should facts on the ground warrant it). The Fed is scheduled to meet two more times before the end of 2016, on November 2 and December 14. You know my view: Since the next scheduled FOMC meeting is six days ahead of the election, I think the Fed will punt to December. My view comes despite the fact that Chair Yellen stated multiple times yesterday that politics plays no role whatsoever in the FOMC decision-making. I don’t believe her. This is not a Fed that has given any indication that it likes to play fast and loose with any macro variable, and this November election (and the post-election economic policy implications it portends) is significant enough in my view to cause any reasonable Fed member to pause, if not yield outright cause for concern. Read more
Last Friday’s (September 9) swoon delivered some knock on rounds overseas—but no knockouts. Don’t be surprised if such selloffs, such minor selloffs, trigger more major concerns within your investing mindset. The psychological imprint of the Great Recession created a remarkable divergence between, on the one hand, historic gains and, on the other, heightened unease and uncertainty about them. I do not know anyone who feels blithely confident that this bull market will run unimpeded for months to come, let alone years to come. In this uncertain environment, FSI continues to stay focused on the facts it knows and the investments its proven, quantitative investment discipline suggests. Read more
Jim Lowell is Editor-in-Chief of the award-winning independent newsletters Fidelity Investor and Fidelity Sector Investor. Through his newsletters, Jim advises individual investors seeking superior performance from their Fidelity investments. He has also written several books on investing, Investing from Scratch (revised edition, Penguin, 2006) and What Every Fidelity Investor Needs to Know (Wiley, 2007) among them. Read more
|Growth & Income||5.7%||11.3%|
|Annuity Growth & Income||2.4%||8.1%|
You don't want to own too many funds that are similar, but how do you tell? A high correlation between funds may mean that your portfolio of funds is not as diverse as you might want it to be. While other tools may compare funds only to the S&P 500, you can use this tool to determine how closely the performance of one Fidelity fund tracks that of any other Fidelity fund. Compare all the funds that you own. To diversify, look for funds that have low correlation with one another.