The State of the Market

The State of the Market

January 2009Jurrien Timmer

Director of Investment Research & Portfolio ManagerFidelity Investments

The information presented reflects the opinions of Jurrien Timmer, Director of Market Research, for Fidelity Management & Research Company as of January 12, 2009. These opinions do not necessarily represent the views of Fidelity or any other person in the Fidelity organization and are subject to change at any time based upon

market or other conditions. Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.

As with all of your investments through Fidelity, you must make your own determination whether an investment in any particular security or fund is consistent with your investment objectives, risk tolerance, financial situation, and your evaluation of the investment option. Fidelity is not recommending or endorsing any

particular investment option by mentioning it in this presentation or by making it available to its customers. This information is provided for educational purposes only, and you should bear in mind that laws of a particular state and your particular situation may affect this information.

Page 2

2008: Deflationary Death Spiral

2009: Reflationary Bull?

2010-2012: Inflationary Bear?

Page 3

2008:Deflation

Page 4

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Europe ($)

Japan ($)

Japan ($)

Emg Mkts

Emg Mkts

Commo-dities

Emg Mkts

Small Value

Emg Mkts

Japan ($)

Large Value

Real Estate

Large Value

Large Growth

Emg Mkts

Commo-dities

Real Estate

Commo-dities

Emg Mkts

Real Estate

Emg Mkts

Europe ($)

Emg Mkts

Bonds

+79.8 +100.3 +43.0 +40.4 +65.0 +29.1 +59.9 +29.1 +74.8 +21.8 +38.3 +35.7 +35.2 +38.7 +66.4 +49.7 +15.5 +32.1 +56.3 +31.6 +34.5 +34.4 +39.8 +5.2

Emg Mkts

EAFE EAFE Japan

($) Commo-

dities Bonds

Small Growth

Small Caps

EAFE EAFE S&P 500 Commo-

dities S&P 500

Europe ($)

Japan ($)

Real Estate

Small Value

Gold Small Growth

Emg Mkts

Commo-dities

Emg Mkts

Gold Cash

+77.2 +69.4 +24.6 +35.2 +38.3 +8.9 +51.2 +18.4 +32.6 +7.8 +37.4 +33.9 +33.4 +28.9 +63.1 +25.9 +14.0 +26.1 +48.5 +26.0 +21.4 +32.6 +27.7 +1.8

EAFE Europe

($) Gold

Small Value

Large Growth

Cash High Yield

High Yield

Europe ($)

Commo-dities

Large Growth

Large Growth

Small Value

S&P 500 Small Growth

Small Value

Bonds Bonds Small Caps

Small Value

Japan ($)

Real Estate

Commo-dities

Gold

+56.2 +44.5 +23.8 +29.5 +35.9 +7.8 +46.2 +15.8 +29.8 +5.3 +37.2 +23.1 +31.8 +28.6 +43.1 +22.8 +8.4 +10.3 +47.3 +22.2 +25.6 +34.7 +21.2 +1.8

Japan ($)

Emg Mkts

Commo-dities

EAFE S&P 500 Large Growth

Small Caps

Large Value

Japan ($)

Cash Small Growth

S&P 500 Large Growth

EAFE Commo-

dities Bonds

High Yield

Real Estate

Small Value

Small Caps

Gold EAFE Europe

($) Commo-

dities

+43.5 +28.6 +23.8 +28.3 +31.5 -0.3 +46.1 +13.8 +25.7 +3.9 +31.0 +23.1 +30.5 +20.0 +40.9 +11.6 +5.3 +5.2 +46.0 +18.3 +17.8 +26.9 +14.4 -30.5

Large Growth

Large Value

Emg Mkts

Commo-dities

Europe ($)

Gold Small Value

Real Estate

Small Value

Europe ($)

Small Caps

Large Value

Europe ($)

Large Value

Convert Large Value

Cash Cash High Yield

Europe ($)

EAFE Gold Large Growth

High Yield

+32.9 +20.0 +14.8 +27.9 +29.1 -1.9 +41.7 +12.2 +23.8 +2.7 +28.4 +21.6 +24.2 +15.6 +36.4 +7.0 +3.8 +1.6 +35.6 +21.4 +14.0 +23.9 +11.8 -26.2

S&P 500 Gold Cash Small Caps

Large Value

Convert Large Growth

Convert Small Caps

Large Growth

Small Value

Europe ($)

Small Caps

Convert Large Growth

Cash Small Caps

High Yield

EAFE EAFE Europe

($) Small Value

EAFE Small Value

+32.2 +19.6 +5.5 +24.9 +25.2 -2.5 +41.2 +12.0 +18.9 +2.7 +25.8 +21.6 +22.4 +11.7 +33.2 +5.9 +2.5 -1.4 +35.3 +20.2 +9.9 +23.5 +11.6 -28.9

Large Value

Real Estate

Large Growth

Large Value

Small Growth

S&P 500 Real Estate

Emg Mkts

Real Estate

S&P 500 Convert Small Value

Real Estate

Bonds EAFE Small Caps

Gold Emg Mkts

Europe ($)

Commo-dities

Real Estate

Large Value

Small Growth

Japan ($)

+31.5 +19.2 +5.3 +23.2 +20.2 -3.2 +35.7 +11.4 +18.5 +1.3 +23.0 +21.4 +18.9 +8.7 +27.0 -3.0 +0.7 -6.0 +34.8 +9.1 +12.2 +22.2 +7.0 -29.1

Small Caps

S&P 500 S&P 500 Small Growth

Small Caps

Europe ($)

S&P 500 Small Growth

Large Value

Real Estate

Europe ($)

Small Caps

Convert Japan

($) Small Caps

Gold Emg Mkts

Convert Japan

($) Large Value

Large Value

Small Caps

Bonds Convert

+31.1 +18.5 +5.2 +20.4 +16.2 -3.4 +30.5 +7.8 +18.1 +0.8 +22.1 +16.5 +14.4 +5.1 +21.3 -5.4 -2.4 -6.2 +34.6 +16.5 +7.1 +18.4 +7.0 -34.6

Small Value

Convert High Yield

S&P 500 Bonds Large Value

Convert S&P 500 Gold High Yield

Commo-dities

Convert Small Growth

Cash S&P 500 High Yield

Large Value

Japan ($)

Real Estate

Japan ($)

Large Growth

S&P 500 Convert Small Caps

+31.0 +17.7 +5.0 +16.8 +14.5 -8.1 +26.9 +7.7 +17.7 -1.0 +20.3 +11.6 +12.9 +4.9 +21.0 -5.9 -5.6 -9.8 +32.5 +16.2 +5.3 +15.8 +5.6 -33.8

Small Growth

High Yield

Europe ($)

Europe ($)

Convert High Yield

Large Value

Bonds High Yield

Small Value

High Yield

High Yield

High Yield

High Yield

Europe ($)

Convert Convert Small Value

Large Value

Small Growth

S&P 500 Commo-

dities S&P 500

Large Value

+31.0 +17.4 +4.1 +16.4 +13.8 -9.6 +24.6 +7.4 +17.1 -1.5 +19.2 +11.3 +12.8 +1.9 +16.2 -6.2 -5.9 -11.4 +30.0 +14.3 +4.9 +14.5 +6.2 -36.8

High Yield

Large Growth

Bonds Convert Small Value

Emg Mkts

Bonds Large Growth

Convert Small Caps

Bonds Small Growth

Bonds Small Growth

Large Value

Europe ($)

Small Growth

Large Value

Large Growth

High Yield

Small Value

Small Growth

Cash S&P 500

+28.7 +15.4 +2.7 +14.2 +12.4 -10.6 +16.0 +5.0 +14.8 -1.8 +18.5 +11.3 +9.7 +1.2 +7.3 -8.1 -9.2 -15.5 +29.7 +11.1 +4.7 +13.3 +5.2 -36.5

Convert Bonds Large Value

High Yield

EAFE Real Estate

Europe ($)

Commo-dities

Small Growth

Large Value

Real Estate

Emg Mkts

Cash Gold Cash S&P 500 S&P 500 EAFE S&P 500 S&P 500 Small Caps

Convert High Yield

Large Growth

+27.3 +15.3 +0.5 +12.5 +10.5 -17.3 +13.7 +4.4 +13.4 -2.0 +18.3 +6.0 +5.3 -0.5 +4.7 -9.1 -11.9 -15.9 +28.7 +10.9 +4.6 +13.3 +1.9 -38.4

Bonds Small Value

Convert Real Estate

Cash Small Growth

EAFE Cash S&P 500 Gold EAFE EAFE EAFE Small Caps

High Yield

EAFE Europe

($) Europe

($) Convert Convert

Small Growth

High Yield

Large Value

Small Growth

+22.1 +7.4 -2.4 +11.4 +8.4 -17.4 +12.1 +3.5 +10.0 -2.2 +11.2 +6.0 +1.8 -2.5 +2.4 -14.2 -19.6 -18.1 +27.9 +7.5 +4.2 +11.9 -0.2 -38.5

Commo-dities

Cash Small Value

Large Growth

Japan ($)

Small Caps

Japan ($)

Europe ($)

Bonds Convert Cash Cash Emg Mkts

Small Value

Gold Large Growth

Large Growth

Small Caps

Gold Gold Cash Large Growth

Small Caps

EAFE

+10.0 +6.2 -7.1 +11.3 +1.8 -19.5 +9.1 -4.2 +9.8 -2.2 +5.6 +5.2 -11.6 -6.5 +0.9 -22.4 -20.4 -20.5 +22.1 +4.6 +3.0 +9.1 -1.6 -43.1

Cash Small Caps

Small Caps

Bonds High Yield

Small Value

Cash Gold Large Growth

Small Growth

Gold Bonds Commo-

dities Real Estate

Bonds Small Growth

EAFE S&P 500 Commo-

dities Large Growth

High Yield

Japan ($)

Japan ($)

Real Estate

+7.7 +5.7 -8.8 +7.9 +0.8 -21.8 +5.6 -5.1 +2.9 -2.4 +1.0 +3.6 -14.1 -18.8 -0.8 -22.4 -21.4 -22.1 +20.7 +6.3 +2.7 +6.3 -4.1 -40.8

Real Estate

Small Growth

Small Growth

Cash Real Estate

EAFE Commo-

dities EAFE Cash Bonds

Japan ($)

Gold Gold Emg Mkts

Small Value

Japan ($)

Japan ($)

Large Growth

Bonds Bonds Bonds Cash Small Value

Europe ($)

+5.9 +3.6 -10.5 +6.3 -1.8 -23.4 -6.1 -12.2 +2.9 -2.9 +0.4 -4.6 -21.7 -25.3 -1.5 -28.3 -29.5 -27.9 +4.1 +4.3 +2.4 +4.8 -9.8 -46.1

Gold Commo-

dities Real Estate

Gold Gold Japan

($) Gold

Japan ($)

Commo-dities

Emg Mkts

Emg Mkts

Japan ($)

Japan ($)

Commo-dities

Real Estate

Emg Mkts

Commo-dities

Small Growth

Cash Cash Convert Bonds Real Estate

Emg Mkts

+5.8 +2.0 -10.7 -15.3 -2.8 -36.0 -10.3 -21.4 -12.3 -7.3 -5.2 -15.0 -24.0 -35.7 -6.5 -30.6 -31.9 -30.3 +1.0 +1.2 +2.0 +4.3 -18.1 -53.21985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

The Periodic Table of Investment Returns

Page 5

Correlation of Returns (to the S&P 500)

-60% -40% -20% 0% 20% 40% 60% 80% 100% 120%

S&P 500

EQTY

50/40/10

PORT 50/30/20

Europe

EAFE

converts

Large Value

Large Growth

HF Comp

High Yield

Small Growth

Small Caps

HF FoF

Emerging mkts

Small Value

EMBI

ALT

REITs

Japan

FI

HF Eqty M/N

Commodities

Inv Grade Bonds

Cash

Gold

Inflation

12mo Corelation of Annual Returns, 20yr average

12mo Corelation of Annual Returns, Mar 2008

Correlation of Returns (to the S&P 500)

100%

99%

99%

98%

98%

98%

98%

98%

96%

96%

95%

91%

91%

91%

89%

89%

84%

84%

83%

77%

69%

30%

-1%

-1%

-2%

-42%

-60% -40% -20% 0% 20% 40% 60% 80% 100% 120%

S&P 500

EQTY

50/40/10

PORT 50/30/20

Europe

EAFE

converts

Large Value

Large Growth

HF Comp

High Yield

Small Growth

Small Caps

HF FoF

Emerging mkts

Small Value

EMBI

ALT

REITs

Japan

FI

HF Eqty M/N

Commodities

Inv Grade Bonds

Cash

Gold

Inflation

12mo Corelation of Annual Returns, 20yr average

12mo Corelation of Annual Returns, Mar 2008

Other than cash and Treasuries, there was no place to hide in 2008.

Page 6

The Efficient Frontier2007-20008 Bear Market

Compound Annual Return vs. Standard Deviation of Monthly Return.

cashinfl

FI

Agg

BAL

EMBI

CNV

L/S

LGSPXEQTY

LV

ALT

FoF

PORT

HF

HY

SG

comm

RUTSV

Japan

EAFEEUR REITsEM

Gold

-40

-30

-20

-10

0

10

20

30

0 1 2 3 4 5 6 7 8 9 10 11 12

Volatility of Returns

Ann

ualiz

ed R

etur

ns

Page 7

The Efficient Frontier2000-2002 Cyclical Bear Market

Compound Annual Return vs. Standard Deviation of Monthly Return.PORT: 50/30/20 model portfolio (stocks/bonds/alternatives).

cashinfl

FI

Agg

BAL

EMBI

CNV

L/S

LG

SPXEQTY

LV

ALT

FoF

PORT

HFHY

SG

comm

RUT

SV

Japan

EAFEEUR

REITs

EM

Gold

-40

-30

-20

-10

0

10

20

30

0 1 2 3 4 5 6 7 8 9 10 11 12

Volatility of Returns

Ann

ualiz

ed R

etur

ns

Page 8

The Efficient FrontierMultiple Horizons

Compound Annual Return vs. Standard Deviation of Monthly Return.

1982-2000 Bull

-40

-30

-20

-10

0

10

20

30

40

0 1 2 3 4 5 6 7 8 9 10 11 12

Standard Deviation of Monthly ReturnsAve

rage

12

Mon

th R

etur

n

The Efficient FrontierMultiple Horizons

Compound Annual Return vs. Standard Deviation of Monthly Return.

2000-2002 Bear

1982-2000 Bull

-40

-30

-20

-10

0

10

20

30

40

0 1 2 3 4 5 6 7 8 9 10 11 12

Standard Deviation of Monthly ReturnsAve

rage

12

Mon

th R

etur

n

The Efficient FrontierMultiple Horizons

Compound Annual Return vs. Standard Deviation of Monthly Return.

2003-2007 bull

2000-2002 Bear

1982-2000 Bull

-40

-30

-20

-10

0

10

20

30

40

0 1 2 3 4 5 6 7 8 9 10 11 12

Standard Deviation of Monthly ReturnsAve

rage

12

Mon

th R

etur

n

The Efficient FrontierMultiple Horizons

Compound Annual Return vs. Standard Deviation of Monthly Return.

2003-2007 bull

2000-2002 Bear

2007-2008 Bear

1982-2000 Bull

-40

-30

-20

-10

0

10

20

30

40

0 1 2 3 4 5 6 7 8 9 10 11 12

Standard Deviation of Monthly ReturnsAve

rage

12

Mon

th R

etur

n

Page 9

Household Savings & WealtthSource: FMRCo, Haver Analytics, Federal Reserve Bank

Quarterly Data since 1950.

403%

473%

529%

630%

503%

618%

400%

450%

500%

550%

600%

650%

Household Net Worthas a % of DPI

12.50

-0.70-2

0

2

4

6

8

10

12

14

'50 '52 '54 '56 '58 '60 '62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10

3.5

4.0

4.5

5.0

5.5

6.0

6.5

Personal Saving Rate (SA, %)

Household Net Worth as a % of DPI

-200

0

200

400

600

800

1000

1200

1400

1600

Household Savings & WealtthSource: FMRCo, Haver Analytics, Federal Reserve Bank

Quarterly Data since 1950.

403%

473%

529%

630%

503%

618%

400%

450%

500%

550%

600%

650%

Household Net Worthas a % of DPI

12.50

-0.70-2

0

2

4

6

8

10

12

14

'50 '52 '54 '56 '58 '60 '62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10

3.5

4.0

4.5

5.0

5.5

6.0

6.5

Personal Saving Rate (SA, %)

Household Net Worth as a % of DPI

-200

0

200

400

600

800

1000

1200

1400

1600

Household Savings & WealtthSource: FMRCo, Haver Analytics, Federal Reserve Bank

Quarterly Data since 1950.

403%

473%

529%

630%

503%

618%

400%

450%

500%

550%

600%

650%

Household Net Worthas a % of DPI

12.50

-0.70-2

0

2

4

6

8

10

12

14

'50 '52 '54 '56 '58 '60 '62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10

3.5

4.0

4.5

5.0

5.5

6.0

6.5

Personal Saving Rate (SA, %)

Household Net Worth as a % of DPI

$1,398

$(117) -200

0

200

400

600

800

1000

1200

1400

1600

Change in Household Credit ($Bil)

A secular turn in consumer behavior?

Page 10

2009:Reflation

Page 11

Measuring Tail RiskDistribution of 12mo Returns for the S&P 500 Index

Monthly data from 1/26 through Oct 2008

0

20

40

60

80

100

120

140<

= -

70%

-70%

<=

> -

65%

-65%

<=

> -

60%

-60%

<=

> -

55%

-55%

<=

> -

50%

-50%

<=

> -

45%

-45%

<=

> -

40%

-40%

<=

> -

35%

-35%

<=

> -

30%

-30%

<=

> -

25%

-25%

<=

> -

20%

-20%

<=

> -

15%

-15%

<=

> -

10%

-10%

<=

> -

5%

-5%

<=

> 0

%

0% <

=>

5%

5% <

=>

10%

10%

<=

> 1

5%

15%

<=

> 2

0%

20%

<=

> 2

5%

25%

<=

> 3

0%

30%

<=

> 3

5%

35%

<=

> 4

0%

40%

<=

> 4

5%

45%

<=

> 5

0%

50%

<=

> 5

5%

55%

<=

> 6

0%

60%

<=

> 6

5%

65%

<=

> 7

0%

70%

<=

> 7

5%

75%

<=

> 8

0%

80%

<=

> 8

5%

85%

<=

> 9

0%

=>

90%

# of

obs

erva

tions

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

12m

o fw

d re

turn

20081930’s

A binary choice: the odds say “buy”, but if we’re wrong, we’re dead.

Page 12

1. Earnings: collapsing.

2. Liquidity: booming.

3. Valuation: favorable.

The “Three Pillars”The “Three Pillars”

Stock Stock MarketMarketStock Stock

MarketMarket

EarningsEarningsEarningsEarnings ValuationValuationValuationValuationInterest Interest

Rate Rate CycleCycle

Interest Interest Rate Rate CycleCycle

Page 13

S&P 500 Price Returns vs. Earnings GrowthQuarterly Data from 1926 through 2004.

Source: Ibbotson Associates, Haver Analytics.

-16.8%

18.5%

14.5%12.9%

11.6%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Number of Occurrences

7%

29%

35%

18%

12%

Less than -25% Between -25% and zero Between zero and +15% Between +15% and +30% More than +30%

Stocks can rally on declining earnings.

Page 14

Inflation Trends Drive ValuationMonthly data from1/1871 through 6/2006.

Source: Haver Analytics, FMRCo, Dr. Robert Schiller.

13.3

15.816.5

21.0

22.8

18.2

15.2

14.3

8.3

10.7

12.4

14.8

15.8

14.3

11.2

10.310.8

13.2

14.5

17.9

19.3

16.3

13.2

12.3

11.5

8

10

12

14

16

18

20

22

24P

rice

to E

arni

ngs

Rat

io

+1/2 standard deviation

-1/2 standard deviation

Price/Earnings Ratio

current

231

71100

325

375

166 177

124

0

50

100

150

200

250

300

350

400

<-4 -4 - -2 -2 - 0 0 - 2 2 - 4 4 - 6 6 - 10 >10Inflation Rate

# of

Obs

erva

tions

Valuations at worst case scenarios.

Page 15

Trailing P/E Ratio

31.8

29.3

22.9

21.0

20.3

20.2

19.6

19.2

18.5

17.9

17.7

17.2

16.8

16.7

16.6

16.1

15.2

14.5

14.1

13.8

10.3

10.5

8.3

7.7

8.7

9.3

12.0

9.9

8.5

10.6

13.8

9.0

12.3

10.7

7.9

9.0

6.7

8.0

3.4

4.2

-2 3 8 13 18 23 28 33

China

India

Hong Kong

BRIC

Indonesia

EM Far East

Japan

Canada

EM (Emerging Markets)

Australia

USA

EM Latin America

Mexico

MSCI AC World

Brazil

MSCI AC World ex USA

EM EMEA

EM Eastern Europe

AC Europe

Russia

Trailing EPS Growth (YoY)

+28%

+41%

+18%

+33%

+47%

+16%

+7%

+25%

+25%

+38%

+15%

+29%

+16%

+20%

+36%

+23%

+37%

+28%

+25%

+35%

+26%

+9%

+28%

+1%

+5%

-8%

+1%

-1%

-9%

-26%

-23%

-16%

-25%

-16%

-13%

-5%

-17%

+6%

+6%

-17%

-30% 0% 30% 60%

The world is cheap again.

Page 16

The Fed's Balance SheetSource: FMRCo, Haver Analytics, Bianco Research.

Weekly data. $2,254

$858

$737

$893

$671

$480 $477

$791

400

500

600

700

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2,000

2,100

2,200

2,300

2,400

1/04 7/04 1/05 7/05 1/06 7/06 1/07 7/07 1/08 7/08 1/09

Total Federal Reserve Bank Credit ($Bil)

Federal Reserve Holdings of Gov't Securities ($Bil)

Shock & Awe.

Page 17

Recession Playbook: 1929-32 vs 1973-75 vs Now

Jobless Rate25

7.2

2

4

6

8

10

12

14

16

18

20

22

24

26

-12 0 12 24 36 48 60 72

UR: 1929-1932UR: 1973-1975UR: 2007-2009UR: Mean

Money Supply

-4.3%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

-12 0 12 24 36 48 60 72

Monetary Base: 1929-1932Monetary Base: 1973-1975Monetary Base: 2007-2009Monetary Base: Mean

Recession Playbook: 1929-32 vs 1973-75 vs Now

Jobless Rate25

7.2

2

4

6

8

10

12

14

16

18

20

22

24

26

-12 0 12 24 36 48 60 72

UR: 1929-1932UR: 1973-1975UR: 2007-2009UR: Mean

Money Supply

-4.3%

92.1%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

-12 0 12 24 36 48 60 72

Monetary Base: 1929-1932Monetary Base: 1973-1975Monetary Base: 2007-2009Monetary Base: Mean

Recession Playbook: 1929-32 vs 1973-75 vs Now

Jobless Rate25

9.0

7.2

2

4

6

8

10

12

14

16

18

20

22

24

26

-12 0 12 24 36 48 60 72

UR: 1929-1932UR: 1973-1975UR: 2007-2009UR: Mean

Money Supply

-4.3%

92.1%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

-12 0 12 24 36 48 60 72

Monetary Base: 1929-1932Monetary Base: 1973-1975Monetary Base: 2007-2009Monetary Base: Mean

Page 18

9/11

550

750

950

1150

1350

1550

1750

Jun-00 Jun-01 May-02 May-03 May-04 May-05 May-06 May-07 May-08

Monetary Base (Bil$)

The Battle at ArmageddonWeekly data. Source: Haver Analytics.

200

250

300

350

400

450

500

550

CRB Spot RawIndustrials

The Battle at Armageddon continues. The Forces of Good are gaining!

Page 19

-$400

-$300

-$200

-$100

$0

$100

$200

$300

Nonborrowed Reserves (Bil.$)

Reflation WatchSource: FMRCo, Haver Analytics Weekly data.

250

450

650

850

1050

1250

1450

1650

1850

2050

High Yield Spread

1200

1400

1600

1800

2000

2200

2400

6/03 12/03 6/04 12/04 6/05 12/05 6/06 12/06 6/07 12/07 6/08 12/08

Commercial PaperOutstanding: AllIssuers (SA, Bil.$)

Reflation signals continue to mount.

Page 20

Mutual Fund & Hedge Fund FlowsSource: TrimTabs, ICI, FMRCo.

Monthly Data. Stacking chart of 3 month sums.

750

800

850

900

950

1000

1050

1100

1150

1200

1250

1300

1350

1400

1450

1500

1550

1600

S&P 500 Index

-350,000

-250,000

-150,000

-50,000

50,000

150,000

250,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Equity Mutual Fund Flows ($mil)

Hedge Fund Flows ($mil)

Some $1 trillion has been redeemed from HFs and MFs.

Page 21

Mutual Fund Flows Monthly Data. Source: ICI, Haver, Factset

750

850

950

1050

1150

1250

1350

1450

1550

1650

SPX

$924.0

-400

-200

0

200

400

600

800

1000

Net flows into money marketfunds (12mo Total, $Bil)

Net Flows: Money marketFunds ($bil)

$3,736

1500

2000

2500

3000

3500

4000

Feb-99 Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09

ICI: Assets: Money MarketMutual Funds (Bil.$)

Cash, TDs and MMF assets total $8 trillion!

Page 22

2010-2012:Inflation?

Page 23

What are the moral hazards?

Bigger deficits. Higher interest ratesHigher inflation.Higher taxes.More regulation.

Result: lower potential GDP.

Page 24

$2,522

0

500

1000

1500

2000

2500

3000

U.S. Gov't Bonds held byForeign Central Banks

-6.2% -7%-6%-5%-4%-3%-2%-1%0%1%2%

'67 '69 '71 '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09

Current Account Deficit/GDP

Gold as Leading Indicator for Bonds Source: FMRCo, Haver Analytics, Factset. Quarterly data.

2.08

6.08

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

10yr Tsy Yield

Gold-Based "Fair Value" for Bonds

What happens when China stops buying?

Page 25

Stocks vs GoldSource: Haver, Factset, Robert Schiller, Bianco Research.

Since 1962. Monthly Data.

10

100

1000

10000

100000

Indexed S&P 500Indexed Gold

2000

1967

1929

19321980

1871 1881 1891 1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011

0

1

10

Trend since 1871

trend + 50%

trend - 50%

SPX vs. Gold

back to 1994 levels

secular turn: 2012-2014?

$2,000 Gold? Bet on it!

Page 26

Crude Oil vs Money SupplyWeekly data since 2001. M3 Retrofitted since 2006Chart concept by Barry Bannister (Stifel Nicolaus)

$38

$145

$10

$30

$50

$70

$90

$110

$130

$150

$7,000 $8,000 $9,000 $10,000 $11,000 $12,000 $13,000 $14,000 $15,000

M3 Money Supply

Cru

de O

il

Oil should be at $110, given where the money supply is.

Page 27

Market Cycles & Secular TrendsSource: FMRCo

Quarterly Data from 1/27 to 12/04.

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

S&P 500 Index (log)

12/0812/02

12/98

9/94

12/90

12/879/823/78

12/74

6/70

12/666/62

12/579/53

6/49

9/32

12/46

6/426/38

-100

-90

-80

-70

-60

-50

-40

-30

-20

-10

0

10

'27 '30 '33 '36 '39 '42 '45 '48 '51 '54 '57 '60 '63 '66 '69 '72 '75 '78 '81 '84 '87 '90 '93 '96 '99 '02 '05 '08

Pct Decline From PreviousBull Market Top

Secular trends.

Page 28

2008: Deflationary Death Spiral

2009: Reflationary Bull?

2010-2012: Inflationary Bear?

Page 29

Important Legal Information•Past performance is no guarantee of future results.

•The information presented reflects the opinions of Jurrien Timmer, Director of Market Research, for Fidelity Management & Research Company as of January 7, 2009. These opinions do not necessarily represent the views of Fidelity or any other person in the Fidelity organization and are subject to change at any time based upon market or other conditions. Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.

•As with all of your investments through Fidelity, you must make your own determination whether an investment in any particular security or fund is consistent with your investment objectives, risk tolerance, financial situation, and your evaluation of the investment option. Fidelity is not recommending or endorsing any particular investment option by mentioning it in this conference call or by making it available to its customers. This information is provided for educational purposes only, and you should bear in mind that laws of a particular state and your particular situation may affect this information.

•The S&P 500® and S&P are registered trademarks of The McGraw-Hill Companies, Inc., and are licensed for use by Fidelity Distributors Corp., and its affiliates. The S&P 500 Index is an unmanaged market capitalization-weighted index of common stocks. All indexes are unmanaged and no investment may be made in any index. Stock values fluctuate in response to the activities of individual companies and general market and economic conditions.

•The Reuters/Jeffries CRB Commodity index is an unmanaged index of various commodities. The index is made up of 19 commodities as quoted on the NYMEX, CBOT, LME, CME, and COMEX exchanges. These are sorted into 4 groups, each with different weightings. These groups are petroleum based products, which based on their importance to global trade, always make up 33% of the weightings; and 3 further group of liquid assets, highly liquid assets and diverse commodities. .

•The Periodic Table of Investment Returns shows the returns of various asset classes over time, ranked from best to worst. The chart represents data through 6/30/2008. Source: FMRCo. Russell 2000: Russell 2000 Index. Small Growth: Russell 2000 Growth Index. Small Value: Russell 2000 Value Index. Large Growth: Russell 1000 Growth Index. Large Value: Russell 1000 Value Index. S&P 500: Standards & Poor’s 500 Stock Index. Bonds: Lehman Brothers Aggregate Bond Index. Cash: 3month T-Bills (Ibbotson Assoc.). Commodities: Goldman Sachs Commodities Index. Real Estate: NAREIT Equity Index. Convertibles: CSFB Convertible Securities Index. Japan: MCSI (in U.S. Dollars). Europe: MCSI (in U.S. Dollars). EAFE: MCSI (in U.S. Dollars). High Yield: Ibbotson Assoc. Domestic High Yield Index. Gold: Ibbotson Associates.