Fidelity Says This Investment Is Entering a ‘Golden Age’ — Should You Invest?

Core Insights - The article discusses the resurgence of convertible bonds, highlighting their growing popularity among both institutional and individual investors, with over $300 billion in outstanding convertible bonds, indicating a potential "golden age" for this asset class [1] Summary by Sections What Are Convertible Bonds? - Convertible bonds are hybrid investments that combine features of both bonds and stock options, providing regular interest payments while allowing conversion into a fixed number of shares of the issuing company's stock [3] Benefits of Convertible Bonds - They offer a steady income stream from interest payments and the potential for profit if the company's stock rises, allowing investors to convert bonds into shares at potentially discounted prices [4] - Convertible bonds are less sensitive to interest rate changes compared to traditional bonds, making them attractive in volatile markets, especially with the potential for interest rates to decline further into 2026 [5] - The convertible bond market is expanding, valued at over $306 billion as of mid-2025, with many tech and AI companies issuing new convertibles to raise capital without immediate equity dilution [6] - They provide access to high-growth companies, as firms like MicroStrategy utilize convertible debt for financing, allowing investors to engage with growth opportunities while mitigating risk [6] - Convertible bonds enhance portfolio diversification by combining equity and debt investments, spreading risk while ensuring steady income [6]