Following a brief market pullback we surveyed all Fidelity technology funds based their performance during the sell off and their relative performance compared to the broader market indexes, and identified the three sector funds that we think are the most likely to continue to perform well in 2021. Chart 1. The tech heavy Nasdaq index is on the verge of breaking out after a brief pullback Chart 2. The Fidelity Select Computers Fund (FDCPX) corrected to a lesser degree than the broad market and now poised to move higher Chart 3. The Fidelity Select Communications Equipment Fund (FSDCX) is outpe ..read more

Summary The steep rise of the Treasury note and long-term Treasury bond yields caused a a sharp selloff in most equity sectors Technology experienced the largest decline, but a short-term oversold rally is likely Natural resources and financials continue to gain, in spite of the market weakness A combination of faster than expected economic recovery from the pandemic, new fiscal stimulus and accommodative monetary policy raised inflation expectations that resulted in a rapid increase if yields (Chart 1). Chart 1. Higher yielding bonds also caused a sharp selloff in technology. Chart 2. shows ..read more

aaaa Chart 1. bbbb Chart 2. ccccc Chart 3. ddddd Chart 4. In a previous article I highlighted the Fidelity Global Commodity Stock Index Fund (FFGCX) as another excellent mutual fund that allows investing in the natural resources boom. FFGCX continues to make higher highs and higher lows while outperforming the S&P500 index (Chart 5). Chart 5 ..read more

The S&P 500 index continued the bullish momentum in the first weeks of 2021 and made a new record high at the end of last week. We are cautiously bullish, as the combination of the rollout of COVID19 vaccinations, expectations for additional fiscal stimulus, and a rebounding economy can continue to fuel the gains. However, in our view, international tensions and the uncertainty around anticipated tax legislation can become headwinds for the equity market. Chart 1. Steadily rising interest rates caused long-term Treasury bonds to enter a declining trend starting in August 2020. This declini ..read more

The comparison of the three-month returns of the 40 Fidelity Select sector funds shows a wide performance gap between the best and the worst sectors: Investments in natural resources gained the most. The combination of the rollout of COVID19 vaccinations, expectations for additional fiscal stimulus, and a rebounding economy can continue to fuel the gains, in our view. In this group, the Fidelity Select Energy Services Fund (FSESX) is the top performer (Chart 1). Chart 1. Higher interest rates and the steepening of the yield curve benefitted stocks in financial services. The Fidelity Select Ba ..read more

Many investment advisors and asset managers like to incorporate a 3-5% asset allocation for alternative investments in their long-term strategies. In theory, alternative investments can provide uncorrelated returns compared to bonds and stocks, which can reduce portfolio drawdowns and volatility. Gold, being a scarce metal, has been used since the beginnings of humanity as a store of value and also as a display of wealth in the form of jewelry. Gold is also known as a safe haven investment in times when increased inflation is anticipated by market participants. While we see merit in the argume ..read more

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Summary: A technical screen of all Fidelity sectors mutual funds shows only three investments that both outperform the market and were able to make new highs after the late July selloff In our view, these sector funds can continue to outperform in the last three months of 2019 The full sector screen is available at FidelitySectorReport.com ..read more