Grounded in Fidelity’s midyear outlook, we're highlighting the market signals that matter now—along with 3 key investing themes to consider. Explore a range of timely ideas to help you adjust your portfolio, uncover potential growth opportunities, and balance protection with income—then get help validating your approach.
Rising government debt and persistent deficits across developed economies may be approaching a tipping point—shifting from a long-term concern to a more immediate driver of market volatility. As fiscal pressures build, investors can help manage risk by diversifying portfolios with new sources of resilience.
Explore selected opportunities to potentially improve portfolio diversification.
Alternatives expand portfolios beyond stocks, bonds, and cash. These investments—such as digital assets, liquid alternatives, and alternatives in private markets—often behave differently from traditional investments and may help improve diversification, generate income, enhance returns, or manage risk.
International stocks have risen 29% over the past year in US-dollar terms, underscoring how a weaker dollar can boost the value of non-US-dollar investments.1 Elevated debt levels may continue to pressure the dollar, potentially driving higher inflation and prompting foreign investors to diversify away from U.S. investments.
TIPs are US Treasury-issued bonds with principal values that rise in line with inflation and fall in line with deflation. Because the interest they pay is tied to their principal value, the dollar amount of their interest payments also rises, providing some protection against inflation.
Some funds to consider
As the market navigates elevated valuations and lingering uncertainties, Fidelity's outlook highlights where opportunity still shines for the rest of 2026. Timely investing ideas spanning growth, diversification, income, and inflation protection can help investors stay positioned for what's next.
Explore selected opportunities to meet your investment objectives.
US tech stocks may still offer growth opportunities, even with higher valuations. Strong earnings and continued investment in areas like AI could help support future performance.
Precious metals, such as gold—or companies in the precious metals industry—may help investors manage inflation and geopolitical uncertainty while adding diversification to portfolios.
Some funds to consider
International stocks may offer attractive diversification and relative value as global markets evolve and leadership broadens beyond the US.
Convertible bonds can offer a hybrid approach, combining equity upside potential with some downside protection from fixed income characteristics.
Some funds to consider
Healthcare companies may provide a mix of steady demand and innovation-driven growth, making them a potential anchor in uncertain markets.
In the current environment, investors can look for potential income across equity and fixed income asset classes. Fidelity’s flexible income managers seek out mispriced opportunities in asset classes that have the potential to deliver strong yield with less volatility than equities, such as dividend stocks and high-yield bonds. Elsewhere, familiar asset classes, such as Treasurys, appear to be benefitting from higher US Treasury yields.
Attractively valued dividend stocks where negative sentiment appears to already be priced in may be worth exploring.
High-yield bonds tend to perform well when economic growth is solid, volatility is moderating, corporate fundamentals are strong, and inflation is elevated. While high-yield bonds offer higher income alongside higher risk, several trends support a more constructive outlook. In a persistently volatile market, investors may take comfort in fixed income investments that balance quality with yield.
In the first half of 2026, economic events related to Iran, inflation, and growth have pushed bond prices down and yields up. In this environment, Treasurys offer low risk of default, relatively attractive yields, and excellent liquidity.
Some funds to consider
Get a complimentary investment consultation with a Fidelity professional. Discuss your current strategy, explore potential opportunities, and stay in control of any decisions about your portfolio.
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Investing involves risk, including risk of loss.
You could lose money by investing in a money market fund. An investment in a money market fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Before investing, always read a money market fund’s prospectus for policies specific to that fund.
Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
1. As of May 5, 2026. Performance represented by the MSCI ACWI ex USA Index. https://www.fidelity.com/learning-center/trading-investing/international-stocks-outlook
Alternative investments are investment products other than the traditional investments of stocks, bonds, mutual funds, or ETFs. Examples of alternative investments are limited partnerships, limited liability companies, real estate, and promissory notes. Each customer is responsible for reviewing the terms of all offering and disclosure documents and agreements associated with any alternative investment and determining the appropriateness of any alternative investment chosen, including the description of risk factors contained in the Memorandum prior to making a decision to invest. Some of the risks associated with alternative investments are:
- Alternative investments may be relatively illiquid, and there is no guarantee on the timing or amount of any dividends or distributions.
- It may be difficult to determine the current market value of the asset.
- There may be limited historical risk and return data.
- A high degree of investment analysis may be required before buying.
- Costs of purchase and sale may be relatively high
Investing in bonds involves risk, including interest rate risk, inflation risk, credit and default risk, call risk, and liquidity risk.
Foreign investments involve greater risks than U.S. investments, including political and economic risks and the risk of currency fluctuations, all of which may be magnified in emerging markets.
Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.
Past performance is no guarantee of future results.
The technology industries can be significantly affected by obsolescence of existing technology, short product cycles, falling prices and profits, competition from new market entrants, and general economic condition.
The precious metals market can be significantly affected by international monetary and political developments such as currency devaluations or revaluations, central bank movements, economic and social conditions within a country, trade imbalances, or trade or currency restrictions between countries. Fluctuations in the price of precious metals often dramatically affect the profitability of companies in the precious metals sector. The precious metals market is extremely volatile, and investing directly in physical precious metals may not be appropriate for most investors. Bullion and coin investments in FBS accounts are not covered by either the SIPC or insurance "in excess of SIPC" coverage of FBS or NFS.
The health care industries are subject to government regulation and reimbursement rates, as well as government approval of products and services, which could have a significant effect on price and availability, and can be significantly affected by rapid obsolescence and patent expirations.
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