As the nation reaches the Aug. 2 deadline to raise the debt ceiling, Fidelity Investments is telling investors not to panic-sell out of stock and bond funds, and to have confidence in money market funds, which have been safeguarded and have complied with stricter holding rules for the past year.
“It is understandable that investors are anxious about policymakers’ ability to reach agreement on the debt ceiling,” says Joanna Bewick, portfolio manager of four Fidelity funds, including the Fidelity Strategic Income Fund. “It’s important to remember that event risk is endemic to the capital markets. Now, more than ever, investors must not let the uncertainty of short-term events lead them to make rash portfolio decisions. Trying to time market gyrations is difficult and often costly. History has shown that near-term market declines, although unnerving at the time, are often followed by rebounds.”