Domestic Equity - Fidelity Investments

Domestic equity

Fundamentals for investors

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Equity mutual funds provide growth potential often necessary for you to achieve your long-term investment goals. And, if you don't own equities, your portfolio may be missing out.

Not FDIC Insured ? May Lose Value ? No Bank Guarantee

Opportunities for building wealth

Historically, equities have been one of the best ways to build wealth, outpacing bonds or short-term investments, albeit with greater price volatility. Yet many investors are wary of equities, either underinvesting in the asset class or jumping in and out of the market--often at the wrong time. In either case, investors may be missing opportunities.

EQUITIES: MORE GROWTH THAN BONDS OR CASH OVER THE LONG TERM

$1,000,000 $800,000 $600,000 $400,000

Stocks

? Bonds ? 30-Day T-Bill ?? Inflation

Stick with stocks for long-term growth potential. The market doesn't go up in a straight line. Corrections and bear markets are normal. The challenge for investors is to ride out setbacks and remember that over time, the market has gone up.

$200,000

0 12/82 12/87 12/92 12/97 12/02 12/07 12/12 12/17 12/22

Past performance is no guarantee of future results. Indices are unmanaged. It is not possible to invest directly in an index. Index performance is not intended to represent the performance of any Fidelity fund. Morningstar, as of 12/31/22. Hypothetical growth of $10,000. Stocks are represented by the S&P 500? Index, a market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance. Bonds are represented by the IA SBBI U.S. Intermediate-Term Government Bond Index. IA SBBI U.S. Intermediate-Term Government Bond Index is a custom index designed to measure the performance of intermediate-term U.S. government bonds. 30-day Treasury Bills are represented by the IA SBBI U.S. 30-day Treasury Bill Index, a custom unmanaged index designed to measure the performance of U.S. 30-day Treasury Bills. Inflation is measured by the Consumer Price Index, an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food, and transportation.

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Equities and equity mutual funds--How they work

Equities--also known as stocks--represent ownership in a public company. When you invest in equities you can benefit from dividends, a portion of the company's profits, and capital appreciation when the price of a company's stock rises. Of course, not all companies pay dividends, and stock prices may decline as well. Equity mutual funds offer a simple way to invest in stocks, allowing you to pool your money with other investors' money. The price of the mutual fund is its net asset value (NAV). Like the price of a stock, the NAV fluctuates daily based on the value of the securities in the fund. Investors in an equity mutual fund do not actually own the securities; they own shares in the fund itself.

Equity mutual funds can be a smart way to invest because you get:

Diversification

One share in a mutual fund could equal an investment in hundreds of companies. While diversification does not ensure a profit or guarantee against a loss, this diversification can reduce the risk of a loss in any one security from hurting your investment as a whole.

Professional management

Fund managers have the experience and resources to research companies, industries, the markets, and the economy when deciding which stocks to buy or sell.

Liquidity and convenience

Mutual funds allow you to buy or sell fund shares using the NAV at the market close. You can also automatically reinvest income from dividends and capital gains, if any, back into the fund.

It's important to know that some funds charge fees when you buy or sell shares, and all funds charge management fees that cover the expenses incurred by the fund. Fees can impact a fund's performance.

Diversification does not ensure a profit or guarantee against a loss.

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EQUITIES AND EQUITY MUTUAL FUNDS

Equity fund categories

Equity mutual funds are often categorized by the size, or market capitalization, of the companies that the fund invests in.

MARKET CAPITALIZATION IS THE VALUE OF ALL OF A COMPANY'S SHARES OF STOCKS.

x = Outstanding shares

Stock price

Market cap

For example, a company with 20 million shares

selling at $50 a share

would have a market cap of $1 billion.

For illustrative purposes only.

Large cap companies

Mid cap companies

Small cap companies

Market cap: $10 billion or more

Stage: Large cap firms often have a reputation for producing quality goods and services, steady growth, and may also have a history of consistent dividend payments.

Market cap: $2 billion to $10 billion

Stage: Typically, these are established companies experiencing or expected to experience rapid growth.

Market cap: $300 million to $2 billion

Stage: Young companies that can be more sensitive to an upturn or a downturn.

Less risk Less growth

More risk More growth

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