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Valuations look reasonable

Stocks prices look reasonable and corporations look strong
  • Stock valuations have risen over the past five years, but while most valuation measurements show that stocks in general aren’t cheap, most don’t indicate that stocks are very overpriced.1
  • Earnings could grow as the economy remains in a mid-cycle expansion and businesses continue to benefit from productivity gains.

The U.S. economy is improving

The economic recovery seems to be accelerating
  • Manufacturing competitiveness has been on the rise, fueled by innovation and low-cost energy.
  • The U.S. has become a leading producer of energy, leading to lower prices.
  • GDP growth could accelerate enough to continue, even with reduced stimulus from the Federal Reserve.

Global risks and opportunities

Global opportunities
  • Emerging markets have recovered in recent months, but still face headwinds.
  • In Japan, the economy has accelerated, credit conditions have improved, and corporate profitability is up.
  • The U.S. remains the strongest of the developed countries.

Stocks offer growth potential

Stocks offer growth potential
  • Historically, stocks have delivered larger returns than bonds or cash.
  • Stocks have done better outpacing inflation than most bonds.2
  • Still leery of stocks? The all-too-human bias to avoid loss can undermine your portfolio’s ability to grow.

Stock ideas to explore

Where to look for opportunities
  • Technology, industrials, and health care may benefit from corporate spending and innovation.
  • Higher quality stocks may deliver much of the upside potential of equities overall, but with less volatility.
  • The biotech industry suffered a pullback this spring, but may benefit from innovation over the longer term.
  • Consumer preferences for products perceived to offer active-living and health benefits may drive performance of some stocks.

Before investing in any mutual fund or exchange-traded fund, you should consider its investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.

Past performance is no guarantee of future results.

1. As of March 31, 2014 the S&P 500 Index had a P/E of 17.1, slightly above the average P/E since 1926 of 15.1.
2. From 1970 to 1980, a period of high and rising inflation and yields, bonds delivered an average real return of –1.1%, while stocks produced a positive average return of 0.2%. Stocks represented by the total return of the S&P 500® Index, and bonds by the Barclays Aggregate Index from 1976 to 1980 and by a composite of the IA SBBI Intermediate-Term Government Bond Index (67%) and the IA SBBI Long-Term Corporate Bond Index (33%) before that. Source: Robert Schiller, Morningstar EnCorr, Fidelity Investments (AART).
Indexes are unmanaged. It is not possible to invest directly in an index.
The S&P 500® Index is an unmanaged, market capitalization–weighted index of common stocks and a registered service mark of The McGraw-Hill Companies, Inc., and has been licensed for use by Fidelity Distributors Corporation and its affiliates.
Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. These risks are particularly significant for investments that focus on a single country or region.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

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