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Stock ideas: health care, tech, and consumer

Consider looking into stocks in the biotech, cloud computing, and fast-fashion industries.

  • Consumer Discretionary Sector

Since the end of 2008 and the global financial crisis, the U.S. stock market has roughly doubled. The rally has coincided with a 138% increase in earnings by companies in the S&P 500® Index over the same period of time.1

Earnings help drive stock performance. Here, three of our sector analysts weigh in with their best ideas in the health care, technology, and consumer discretionary sectors—and the industries that may grow their earnings to propel stocks even further.

Sector ideas: Health care, tech, and consumer

Hear about opportunities in health care, tech, and consumer. Watch the videos.
  • Biotech. After decades of investment, the growth of research and development within the biotech industry is beginning to produce novel therapeutics for many unmet medical conditions. In 2012, the largest number of new drugs was approved by the U.S. Food and Drug Administration (FDA).3 The five largest biotech companies by market capitalization are Gilead Sciences, Inc. (GILD), Amgen, Inc. (AMGN), Celgene Corporation (CELG), Biogen Idec Inc. (BIIB), and Regeneron Pharmaceuticals, Inc. (REGN).
  • Digitization within health care. With the ballooning costs of health care in mind, companies that can help drive health care costs down could be part of an emerging-growth story. Software companies in the health care information technology industry, and others with business models that can help companies in the healthcare sector reduce costs, may experience increased productivity. They could fundamentally change how health care is delivered in the United States, and potentially around the world, over the next decade.

Investing implications

After the powerful four-year move in stocks, some investors may be questioning the sustainability of these gains. However, if companies are able to grow their earnings—and these industries may be able to do just that—then there could potentially be more upside for stocks.

Learn more

  • Research the Fidelity Select Technology Portfolio (FSPTX).
  • Research the Fidelity Select Consumer Discretionary Portfolio (FSCPX).
  • Research the Fidelity Select Health Care Portfolio (FSPHX).
  • Try the Fidelity® Sector Portfolio Builder.
Before investing, consider the investment objectives, risks, charges and expenses of the fund or annuity and its investment options. Call or write to Fidelity or visit Fidelity.com for a free prospectus and, if available, summary prospectus containing this information. Read it carefully.
Views and opinions expressed may not reflect those of Fidelity Investments. These comments should not be viewed as a recommendation for or against any particular security or trading strategy. Views and opinions are subject to change at any time based on market and other conditions.
As of August 31, 2013, the most recent disclosure of Fidelity Select Technology Portfolio's holdings, the fund held salesforce.com, Amazon.com, Rackspace Hosting, and Microsoft.
As of August 31, 2013, the most recent disclosure of Fidelity Select Health Care Portfolio's holdings, the fund held Gilead Sciences, Amgen, Biogen, and Regeneron.
As of August 31, 2013, the most recent disclosure of Fidelity Select Consumer Discretionary Portfolio's holdings, the fund held TJX Companies, The Gap, and Fast Retailing.
Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments.
Because of their narrow focus, sector funds tend to be more volatile than funds that diversify across many sectors and companies.
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.
The consumer discretionary industries can be significantly affected by the performance of the overall economy, and by interest rates, competition, consumer confidence and spending, and changes in demographics and consumer tastes.
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.
1. Equity market performance reflects total returns for the S&P 500® Index and includes reinvested dividends over the period from December 31, 2008, through June 30, 2013. Cumulative total return during this period was 96.19%.
2. Source: Wired.com.
3. Source: Reported new drugs approved by the U.S. Food and Drug Administration through 2012.
Indexes are unmanaged. It is not possible to invest directly in an index.
The S&P 500® Index is a market capitalization–weighted index of common stocks, is a registered service mark of The McGraw-Hill Companies, Inc., and has been licensed for use by Fidelity Distributors Corporation and its affiliates.
Past performance is no guarantee of future results.
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