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Fidelity: Don't Fret Over Market Paradoxes, Diversify Instead


The market is facing 3 separate paradoxes and the only way to overcome the head scratching trio is to stay invested and diversified, says Jurrien Timmer, Director of Global Macro for Fidelity Investments. The U.S. and European economies are accelerating, yet Japan and especially China appear vulnerable. The U.S. economy is recovering from a brutal winter and the Fed is tapering, yet the 10-year Treasury yield fell to 2.57% in early May. The DJIA recently reached an all-time high, yet the small-cap Russell 2000 Index is at its low for the year. Timmer's conclusion is that bond yields may stay lower than expected, and stocks may remain temporarily stuck in this sideways range, but it could ultimately be a launching pad for higher prices.