Join the Insights from Fidelity Wealth Management℠ team as we look ahead to the new year. We will discuss the many factors influencing today’s economy and how they are shaping the financial markets as we head into 2026. We’ll also talk about how to handle periods of uncertainty, ways to help your portfolio stay on target, and some wealth planning strategies to help you in the year ahead. Specific topics we’ll cover include: - The latest news on Fed policy , inflation, the labor market, and consumer spending ...

On this episode of Market Sense, Fidelity leaders discuss why diversification is especially important in today’s environment of geopolitical risks and concentrated exposure to tech and AI stocks. They highlight practical steps like rebalancing, adding international exposure, and considering bonds and alternatives to potentially reduce risk. Plus, all your latest market headlines in 20 minutes. Topics covered: • Diversification • Geopolitics • AI • Tech concentration • International stocks • Bonds • Alternat ...

Core Viewpoint - The article suggests that as investors enter 2026, there may be a need to reconsider investment strategies, moving away from last year's high-performing tech and AI stocks due to signs of economic slowdown and labor market challenges [2]. Investment Recommendations - **Own: Vanguard Dividend Appreciation ETF** - This ETF focuses on companies that have increased dividends for at least 10 consecutive years, making it a solid choice for dividend growth. It has a low expense ratio of 0.05%, making it cost-effective for investors [5]. - The ETF's market-cap-weighted approach means larger companies dominate the portfolio, which may not align with the dividend-focused strategy, as seen with top holdings like Broadcom, Microsoft, and Apple, which have low yields [6]. - Dividend payers are expected to perform well in 2026 due to potential slower growth and increased market volatility, as they typically provide durable earnings and strong cash flows [7]. - **Own: Vanguard Total Bond Market ETF** - This ETF represents a comprehensive coverage of the U.S. bond market, including various types of bonds, and has an even lower expense ratio of 0.03% [8]. - The article anticipates a market rotation favoring cyclical and defensive sectors, suggesting that bonds and dividend stocks could benefit from a slowdown in U.S. economic growth [8].

Group 1 - The core viewpoint of the article emphasizes a consistent preference for equities over bonds for income over the past decade, which will continue into the new year [1]

Core Viewpoint - The fixed income market is expected to present opportunities in 2026, despite ongoing uncertainties from 2025, with a strong emphasis on bonds as a favorable investment choice [1][2][3]. Market Conditions - In 2025, the capital markets were heavily focused on artificial intelligence (AI), while other factors such as tariffs, geopolitical tensions, and interest rates remained significant [2]. - Monetary policy will continue to be a key consideration for fixed income investors in 2026, with Vanguard advocating for bonds as a primary investment vehicle [2]. Investment Strategy - Vanguard maintains that high-quality bonds, both taxable and municipal, will provide compelling real returns due to higher neutral rates, with expected returns aligning closely with current portfolio income levels [3]. - The Federal Reserve is anticipated to implement only one interest rate cut in 2026, although this outlook is met with skepticism [3]. Bond Market Outlook - Bonds are viewed as a strong investment regardless of central bank actions in 2026, particularly as AI valuations appear inflated, enhancing the attractiveness of bonds [3][4]. - U.S. fixed income is expected to offer diversification benefits, especially in scenarios where AI underperforms, which Vanguard estimates has a 25%-30% probability [4]. ETF Recommendations - The Vanguard Total Bond Market ETF (BND) is recommended for investors seeking comprehensive exposure to the U.S. bond market, potentially comprising the entire 40% allocation in a 60-40 portfolio [4]. - For corporate bond exposure, the Vanguard Total Corporate Bond ETF Shares (VTC) is highlighted as a suitable choice due to tighter credit spreads and improving quality [5]. - The Vanguard Tax-Exempt Bond ETF (VTEB) is suggested for broad municipal bond exposure, capitalizing on yield, credit quality, and tax-free income [6].

Joining us now is Bill Smei. He's the chief investment officer at Sme Capital Management. Bill, it's great to see you again.Welcome. >> Hey, great to be with you. >> Jump in here.You can pick the housing piece first if there's anything in that last discussion that you know you wanted to chime in on. >> Well, I I I don't want to pick on your prior guest too much, but somebody once said if you put all the economists end to end, you'd never get anywhere. >> Understood.But where so do you come down as as in thi ...

Companies across the US and Europe are gearing up to sell a record amount of high-grade bonds in 2026, testing investors’ appetite as yields drift lower https://t.co/PtjJxOmUBx ...

Argentina wants to avoid selling bonds under New York law in January, Economy Minister Luis Caputo said on X, as anticipation for the country’s comeback to international debt markets continues to mount https://t.co/6My2H4FIKW ...

Uzbekistan is introducing new rules that allow companies to pursue dual listings and issue bonds denominated in foreign currencies https://t.co/SoRnCymAOJ ...

An offshore fund is buying about $6 billion of Colombian local bonds on Friday through a direct negotiation with the government https://t.co/5lLc7o7Ww3 ...