We have two funds for you today; Three-star FDEGX’s top five holdings are: Total System Services Inc (TSS, 3.05% of assets); ON Semiconductor Corp (ON, 2.36%); VeriSign Inc (VRSN, 2.30%); Wyndham Worldwide Corp (WYN, 2.30%) and Huntington Ingalls Industries Inc (HII, 2.19%). Four-star FCNTX’s top holdings are: Facebook Inc A (FB, 6.95%); Amazon.com Inc (AMZN, 5.71%); Berkshire Hathaway Inc A (BRK.A, 5.21%); Alphabet Inc A (GOOGL, 3.63%) and Alphabet Inc C (GOOG, 3.32%).
Fidelity Contrafund (FCNTX) and Fidelity Growth Strategies (FDEGX)
From Fidelity Monitor & Insight
Since “bottoming” on February 8, the markets have rebounded with the S&P 500 regaining about half of its losses. I put bottoming in quotes because we could get a retest of the lows before this correction is finally over. But whether we get further declines or not, my advice from last month remains the same: Stay with your investments, because this bull market is not dead yet.
When interest rates are moving up from very low levels, as they are now, stocks typically enjoy rising multiples (P/E ratios). That, combined with faster earnings growth, drives stocks higher. Historically, the best returns for stocks have come when rates are rising and the 10-year Treasury yield is between 2% and 3% — right where we are now (the 10-year Treasury yield was 2.87% at the end of February).
For now, we remain in the sweet spot in terms of economic growth and interest rates. And a 4% yield on the 10-year is likely a long way off. So, stick with your investments and ride out any downturns.
We sold our Small Cap Growth Fund as small caps struggled mightily during the recent market volatility. Given the risks, we decided to use the proceeds to add to our holdings of Fidelity Contrafund (FCNTX) and Fidelity Growth Strategies (FDEG), as we decided to buy a bit more lower-volatility, mid- and large-cap growth funds.
Jack Bowers, John M. Boyd and John Bonnanzio, Fidelity Monitor & Insight, www.fidelitymonitor.com, 800-397-3094, Fidelity Monitor Insight, March 2018