In the past week, Doug attended an event put on by Fidelity Investments that was very informative, particularly regarding fixed income. He brought back several financially relevant insights (listen to the full podcast here), such as:
- The U.S. economic growth is slowing but still above 2%
- Fidelity strategists believe that China is going to stimulate its economy, and this would be a good thing for global growth
- Long-term interest rates will remain low
- Because of low interest rates, Fidelity thinks there will be investment opportunities: REITs, consumer staples and health care are possibilities
Fidelity gave three reasons why long-term interest rates will not go up:
- First, demographics. Japan, Europe and the United States all have predominantly aging populations, and what do people tend to do when they get older? They tend to spend less money and to save more money. When a population is spending money, it increases economic growth—on the flip side, a population that is saving money has little impact on economic growth.
- Second, the Central Bank policies. Europe and Japan are continuing to push interest rates lower. Switzerland, Sweden, Germany and Denmark all currently have negative interest rates.
- Third, the U.S. still battling deflation.
For further discussion on this topic, listen to the full podcast here, and as always, contact us at 800-391-1118 for information on how our team can help you invest your portfolio today.