Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
FYI: All of a sudden, volatility has returned to the markets. The U.S. dollar is soaring and deflation fears are mounting. Stock benchmarks are swinging wildly as global growth fears rise. And the S&P 500® Index is down roughly 9% from its recent all-time high and is now barely up for the year. Regards, Ted https://www.fidelity.com/viewpoints/market-and-economic-insights/why-market-volatility-is-back
RE: "The U.S. dollar is soaring and deflation fears are mounting. Stock benchmarks are swinging wildly as global growth fears rise." ... Charles Dickens might love this. "Swinging wildly" has a nice ring. But, is this kind of hype typical of Fidelity's communications with their investors? I hope not. (Perhaps that's the reason I don't own any of their funds.)
Yes - there's some underlying truth to each point. The dollar has been very strong (sometimes seen as a positive) due to the improving condition of the U.S. economy relative to much of the world and expectations interest rates will be rising here. However, the recent 9% retrenchment in the S&P doesn't even qualify as a normal "correction" under the generally accepted definition of 10% or more. Repeat: Not even a "correction" by standard definition. ... So, another 9% off relatively soon wouldn't surprise me. Nor is it in itself cause for alarm. That's what stock markets do - and have historically done. They rise and fall.
As guardians of their investors' money, Fidelity owes it to them to shoot straight. Skip the hyperbole. Tell them that valuations are stretched in many markets and they shouldn't expect the kind of stock market gains going forward they've seen over the past 5 years. Caution them about the significant dangers bonds face should rates rise. Point out market sectors where valuations look most attractive. Talk about the virtues of rebalancing periodically for most investors. Above all else, remind them that equity investing is for the long term as measured in years - not day to day or weekly.
Comments
Yes - there's some underlying truth to each point. The dollar has been very strong (sometimes seen as a positive) due to the improving condition of the U.S. economy relative to much of the world and expectations interest rates will be rising here. However, the recent 9% retrenchment in the S&P doesn't even qualify as a normal "correction" under the generally accepted definition of 10% or more. Repeat: Not even a "correction" by standard definition. ... So, another 9% off relatively soon wouldn't surprise me. Nor is it in itself cause for alarm. That's what stock markets do - and have historically done. They rise and fall.
As guardians of their investors' money, Fidelity owes it to them to shoot straight. Skip the hyperbole. Tell them that valuations are stretched in many markets and they shouldn't expect the kind of stock market gains going forward they've seen over the past 5 years. Caution them about the significant dangers bonds face should rates rise. Point out market sectors where valuations look most attractive. Talk about the virtues of rebalancing periodically for most investors. Above all else, remind them that equity investing is for the long term as measured in years - not day to day or weekly.