Quantitative Easing in Europe and in Japan has started to make a positive impact on equity prices in developing markets. In our view, one of the best ways to participate in this long-term trend is by investing in the Fidelity Diversified International Fund (FDIVX). FidelitySignalissued a BUY signal for the fund on February 8 and the fund was included in our Diversified Model Portfolio, as of that date.
The potentially stabilizing U.S. dollar and commodity prices, and the prospect of world-wide economic recovery in 2016 are making emerging market investments attractive again to investors seeking growth.
The Fidelity Southeast Asia Fund (FSEAX) provides a solid way to participate in the Chinese and other Southeast Asian markets. FidelitySignalissued a BUY signal for the fund on January 23 and the fund was included in our Aggressive Growth Model Portfolio, as of that date.
For investors seeking broad diversification across emerging markets including Southeast Asia, Eastern Europe and Latin America, the Fidelity Emerging Markets Fund (FEMKX) is our top rated choice. FidelitySignal issued a BUY signal for the fund on April 7 and the fund was included in our Megatrends Model Portfolio, as of that date.
Global equity markets are “climbing a wall of worry”, in spite of uncertainty about the potential exit by Greece from the Eurozone and geopolitical events in the Ukraine, in the Middle-East and in Latin America.
Quantitative easing by the European Central Bank and the Bank of Japan can lead to inflation of financial assets in 2015
Low interest rates and much reduced energy costs have started to fuel a new boom in consumer spending in the U. S.
The best growth strategy this year may be to diversify between market-leading sectors and emerging investment areas (source: FidelitySignal.com)
Broad market indexes, such as the S&P 500, the Dow Industrial Average and the Nasdaq, are making higher highs again after a treacherously volatile two-month period starting in early December. The good news is that investors have not shied away from risk-on investments, which is very bullish.
The FidelitySignal Aggressive Growth model portfolio can provide an example of how an aggressive asset allocation strategy can work in the current market environment. The asset allocation mix of the portfolio consists of five Fidelity mutual funds. The funds represent investments in both leading sectors and emerging investment areas:
Renewed worries about the slowing Chinese economy caused the sell off of equity markets around the globe today. The rapid devaluation of the Argentine currency had a negative impact on Latin American markets resulting in the Fidelity Latin America Fund (FLATX) being the worst performer of all Fidelity funds. The sell off spread to Asia, as well, resulting in the Fidelity Southeast Asia Fund (FSEAX) entering a bearish downtrend. The weakest U.S. equity fund today was the Fidelity Select Energy Services Fund (FSESX).
Emerging market investments have under-performed for most of 2013, but as money starts flowing into Chinese, Indian and Brazilian equities again, the Fidelity Emerging Markets Fund (FEMKX, last change: 1.7%) may be a good choice for investors who are looking to diversify.