FIDELITY: Three risks we're watching in the second half

Maura Schauss |

Fidelity resources shared by CFP® Team at Washington Wealth Advisors 

Sharing some perspective from our Fidelity resources.  Knowledge is empowering and can support you in remaining focused on your goals.

How to manage what lies ahead: Don't panic. 

Key takeaways

  • The second half of 2022 will likely feature volatile markets and low returns on investments.

  • One of the biggest concerns for markets is how the Federal Reserve will manage inflation in the US.

  • China's zero-COVID policy and the war in Ukraine are also crucial concerns that could affect the US economy and markets.

  • Higher interest rates are unlikely to lead the US economy into recession in the near future.

The first half of 2022 has reminded investors, both professionals and do-it-yourselfers alike, that the predictable cycles of economic and business activity aren't the only things that can push financial markets up and down.

As the sun rose on January 1, the future looked bright. Corporate earnings were strong, the economy was growing, stocks were near record highs, the COVID threat was shrinking, and the Federal Reserve was planning only a gradual rise in interest rates.

But at mid-year that hopeful dawn has given way to a bear market in stocks, the biggest-ever drop in bond prices, the highest inflation in decades, the sharpest rise in interest rates in years, and the most destructive conflict in Europe since World War II.

Fidelity capital markets strategist Claus Te Wildt calls this the most complex market environment he's ever seen.

"Inflation and what the Fed does about interest rates, the Ukraine conflict, and China's COVID policies will have the most material impact on investing in the second half of the year," says veteran Fidelity portfolio manager Ford O'Neil. "They're extraordinarily hard to predict, but you're going to see a lot of headlines about those things in the coming months." 

Learn more about the 3 risks ahead and how they may affect your money. 


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