This presentation is provided for informational purposes only.
Global markets generally enjoyed incremental economic improvement, modest inflation, highly accommodative monetary policies, and low volatility. Policy risk continued to ebb, though bank failure in Cyprus and sequestration cuts in the U.S. may create ongoing headwinds.
U.S. stocks had strong, broad-based returns in the first quarter. The major categories experienced robust gains, with little dispersion among top-performing mid caps, small caps, and value stocks. All U.S. stock categories posted double-digit one-year returns.
Market yields rose modestly over the past few months as the economy gained traction. If this pattern continues, risks are low of an aggressive tightening and a Fed-induced sharp downturn in stock and bond prices.
Get insight from Fidelity's Asset Allocation Research Team in the Q2 2013 Quarterly Market Update.
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.
The Asset Allocation Research Team (AART) conducts economic, fundamental, and quantitative research to develop dynamic asset allocation recommendations for the Global Asset Allocation Division of Fidelity Asset Management (FAM), the investment management arm of Fidelity Investments. Miles Betro, CFA, senior analyst, and Craig Blackwell, analyst, also contributed to this article.
The information presented above reflects the opinions of Dirk Hofschire, CFA, senior vice president, asset allocation research, and Lisa Emsbo-Mattingly, director of asset allocation research, as of April 10, 2013. These opinions do not necessarily represent the views of Fidelity or any other person in the Fidelity organization and are subject to change at any time based on market or other conditions. Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Past performance and dividend rates are historical and do not guarantee future results.
Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments.
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.
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