Investment and Insurance Products are:
We anticipate the U.S. economy will gather momentum in 2026, as favorable policy tailwinds and durable investment trends converge to overcome residual challenges from trade and immigration uncertainties.
We expect that accelerating economic growth, lower short-term interest rates, and moderating inflation will support sales, margins, earnings growth, and equity returns in 2026.
Despite conflicting signals from slow job growth but a strengthening economy, we see the Federal Reserve (Fed) maintaining a downward rate trend, with steepening yield spreads between short- and long-term rates offering investment opportunities.
We expect further price gains in both Precious and Industrial Metals during 2026 but rising crude oil supplies should restrain overall commodity returns for the year.
Technology
In 2026, we expect to see artificial intelligence (AI) develop further from a concentrated technology phenomenon into a broad-based economic growth catalyst. And other technology trends are emerging. In particular, tariffs, reduced labor supply, and tax cuts should combine to encourage firms to speed up productivity-enhancing changes across industries.
More specifically, the technology, energy and infrastructure demands of digital assets, autonomous vehicle production, growing defense needs, and industrial automation more broadly should drive opportunities in the Industrials and Utilities equity sectors. Cybersecurity as a rising national-security priority looks to us like another durable trend, and investors could look to the Systems Software subgroup under the Software subsector for companies that are tackling this technology project.
Digital assets
In our view, digital assets and blockchain represent a transformative technology that aligns with broader trends such as AI, automation, and next-generation payment systems. Digital assets have evolved into a more mainstream and readily accessible asset class — particularly attractive to investors seeking innovation, diversification, and long-term growth potential.
We see two related risks to digital asset investing. First, wide price swings have made digital assets materially more volatile than traditional equity, fixed income, and commodity assets. Second, digital assets may move closely - higher or lower - with equity prices when extremes in liquidity develop.
We believe that the persistence and pace of technological change will reinforce the economic utility of these assets and create, not only more access through regulated investment vehicles, but also attract more awareness and interest among long-term investors. We will continue to build our educational resources around these assets.
International
As U.S. fiscal policy is driving domestic growth and propelling markets to new highs, global equity markets also are exhibiting strong performance and becoming more competitive. We maintain our home-country bias with a preference for U.S. equities and fixed income. However, given our expectations for easing global inflation and lower short-term U.S. interest rates, it follows that the U.S. dollar should remain stable and thereby could support further lower borrowing costs in emerging markets (EM).
Broadly, EM Equities have shifted toward more growth-oriented sectors. Countries like South Korea and Taiwan, along with the broader ASEAN (Association of Southeast Asian Nations) region, are benefiting from Beijing’s strategic pivot to compete with the U.S. in technology. This same group of countries is already taking over significant manufacturing as U.S. importers divert their supply chains out of China.
We expect this production diversification to broaden to other regions of the world. Moreover, increased defense spending and infrastructure rebuilding in European nations like Germany, coupled with less disruptive tariff impacts than we previously anticipated, support our preference for a full international equity allocation.
Growth opportunities
While still above their prepandemic levels, money market (cash alternatives) and short-term yields may struggle to compensate for inflation in some important segments of the economy.
We see an opportunity to shift the investment approach from liquidity preservation to growth opportunities that should position investors to better manage against rising costs. Headlines around trade and other policies can be confusing and concerning and can cause investors to over-invest in cash alternatives, but we believe a selective approach to equity and fixed-income investment can help bridge the gap between money market yields and inflation in medical care and other essential services.
The earnings-growth and balance-sheet strength of U.S. Large Cap Equities and U.S. Mid-Cap Equities make those asset classes our favored equity asset classes. In fixed income, we favor high-quality investment-grade bonds, residential mortgage-backed securities, and municipals. Commodities, especially gold and precious metals, may offer capital preservation, in our view, amid ongoing geopolitical and inflation risks and given our outlook for a stable U.S. dollar and unrelenting central-bank demand.
Alternatives
In a market environment shaped by lower short-term interest rates, macroeconomic uncertainty, and ample liquidity, we think alternative investments and private assets could be attractive vehicles for portfolio resilience and upside capture. As investors search for yield, Private Infrastructure is gaining traction as an income diversifier, supported by tailwinds from business plant and equipment spending and technological and digital infrastructure buildouts. This asset class aligns well with current White House and congressional fiscal priorities and offers inflation-sensitive cash flows, in our view.
We believe that qualified investors increasingly see Private Equity as a strategy to access potentially fast-growing companies, especially in sectors benefiting from fiscal stimulus and technological transformation. Private-capital strategies may increasingly target the small and mid-sized firms in infrastructure improvement and in reshoring production to the U.S., and we expect that Private Equity can complement allocations to traditional public markets. In particular, we see opportunities in secondaries, small- and middle-market, growth-equity, and infrastructure investments.
Rapid economic policy changes over the past few months have roiled investors and capital markets. Beyond the sheer complexity of reshaping the global trade order, we remain cautious of persistent regional conflicts in Eastern Europe and the Middle East and lingering geopolitical tensions in the East and South China Seas.
Amidst the policy-induced ebbs and flows, one counter strategy is to seek portfolio exposure to areas that we expect to suffer less negative impact. Reallocating from the Consumer Discretionary equity sector to the Utilities sector could hedge against extended equity-market downside and tariff uncertainty.
Our favorable sub-sectors within the Industrials sector like Aerospace & Defense and Commercial & Professional Services have low exposure to broad economic growth and tariffs in general. For investors who remain hesitant, some buffer in a higher-yielding money-market position may be prudent until markets settle.
Quality assets
We believe a focus on quality asset classes and sectors together with proper diversification are essential during this period of policy uncertainty and slowing economic growth.
Although U.S. large-cap and mid-cap equities have been underperforming developed-market equities in 2025, they remain an important longer-term allocation within U.S. investors’ portfolios. We believe these higher-quality assets are well-suited to weather the policy storm given their strong balance sheets, earnings, and profitability.
We believe fixed income can serve as a potential counterbalance to equities, but we believe now is not the time to significantly overweight the extremes of risk in cash and high yield. However, we believe some short-term fixed-income cushion makes sense, especially to avoid being compelled to sell investments while financial markets are volatile.
Investment income
Fixed-income assets offer a steady stream of cash flow for investors seeking income. As the yields on shorter maturities likely will fall faster than on longer maturities, we believe the best opportunities are in the intermediate space (three- to seven-year maturities), offering attractive income and exposing investors to less volatility than longer-dated maturities
We see an opportunity for investors seeking tax-exempt income as municipal-bond yields have recently climbed, and we believe that the tax-exempt status of municipal securities is not at risk of being repealed.
Investors may consider diversifying income sources from other asset classes. Some of the sectors we favor offer attractive dividend yields. For example, the S&P 500 Energy sector offers approximately 3.5% in dividend income.
Artificial intelligence
Generative AI is transforming industries, and we believe it is ushering in a new era of productivity and innovation.
AI’s transformative potential is most evident in manufacturing. Smart technologies, robotics, and predictive analytics enable streamlined operations, waste reduction, and productivity gains. AI may help to facilitate some of the current administration’s goals such as reshoring production, reducing dependence on global supply chains, and stimulating local economies.
Additionally, AI’s adoption opens opportunities across cyclical equity sectors, including our favored Information Technology, Communication Services, Energy, and Financials sectors. The U.S. is the leader in AI innovation, supported by key sub-sectors such as Semiconductors, Software, and Interactive Media & Services.
International exposure
Year to date, international stocks have significantly outperformed U.S. equities following a 15-year stretch in which the S&P 500 Index dominated both developed and emerging markets. Going forward, we have little doubt the U.S. can maintain its status as the global leader both economically and in terms of equity-market performance.
We believe U.S. markets will resume their leadership after this recent period of underperformance, although the gap with other economies could narrow. Our equity guidance favors U.S. over international exposure; however, we prefer to complement U.S. exposure with a neutral (full) allocation to DM ex-U.S. Equities and an underweight exposure to EM Equities as these countries focus on growing their economies and adapting to the new world order.
Economy
We believe tariff impacts may slow the economy and nudge inflation higher coming into 2026, before positive policy and technology spending trends reverse those conditions into year-end. The economic improvement should support financial markets through the year.
Our view is that a comparatively favorable U.S. economic outlook should drive U.S. financial-market outperformance compared with overseas markets.
|
2025 latest* |
Year-end 2026 target |
|
|---|---|---|
|
U.S. GDP growth |
2.3% (Q2) |
2.4% |
|
U.S. CPI inflation1 |
3.0% (Sept.) |
2.8% (Dec.) |
|
U.S. unemployment rate2 |
4.3% (Sept.) |
4.9% (Dec.) |
|
Sources: Wells Fargo Investment Institute and Bloomberg *All latest numbers from Bloomberg as of November 28, 2025. Targets for 2026 are based on forecasts by Wells Fargo Investment Institute as of December 9, 2025 and provide a forecast direction over a tactical horizon. Average percent change from the same period a year ago, unless otherwise noted. GDP = Gross Domestic Product. CPI = Consumer Price Index. Q2 = second quarter. Forecasts, targets, and estimates are based on certain assumptions and on our current views of market and economic conditions, which are subject to change. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results.
|
Fixed income
Amid slow job growth but an improving economic outlook, we believe the Fed will carefully parse the economic data to maintain its statutory goals of full employment and price stability to the exclusion of political noise surrounding the Fed board’s membership.
Yield should remain the central goal for investors in 2026, and credit quality the key metric to watch, as earnings durability and continued capital-market access likely drive strong investment-grade and high-yield corporate issuer performance.
|
2025 latest* |
Year-end 2026 target |
|
|---|---|---|
|
Federal funds rate |
3.75% – 4.00% |
3.00% – 3.25% |
|
10-year U.S. Treasury yield |
4.01% |
4.00% – 4.50% |
|
30-year U.S. Treasury yield |
4.66% |
4.50% – 5.00% |
|
Sources: Wells Fargo Investment Institute and Bloomberg *All latest numbers from Bloomberg as of November 28, 2025. Targets for 2026 are based on forecasts by Wells Fargo Investment Institute as of December 9, 2025 and provide a forecast direction over a tactical horizon. Forecasts, targets, and estimates are based on certain assumptions and on our current views of market and economic conditions, which are subject to change. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results. |
Equities
We expect stock prices to continue to look beyond the noise of a midterm election year and to march higher, driven primarily by earnings growth rather than price-to-earnings (P/E) valuation expansion.
We rate U.S. Large Cap Equities and U.S. Mid Cap Equities as favorable, compared with an unfavorable rating on U.S. Small Cap Equities. Within international equities, we hold a neutral rating on both Developed Market (DM) ex-U.S. Equities and Emerging Market (EM) Equities.
|
2025 latest* |
Year-end 2026 target |
|
|---|---|---|
|
S&P 500 Index |
6,849 |
7,400 – 7,600 |
|
MSCI EAFE Index |
2,810 |
2,800 – 3,000 |
|
Sources: Wells Fargo Investment Institute and Bloomberg *All latest numbers from Bloomberg as of November 28, 2025. Targets for 2026 are based on forecasts by Wells Fargo Investment Institute as of December 9, 2025 and provide a forecast direction over a tactical horizon. Forecasts, targets, and estimates are based on certain assumptions and on our current views of market and economic conditions, which are subject to change. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results. |
Real assets
Lower interest rates, a stable U.S. dollar, and quickening economic growth in 2026 could drive moderate demand growth for commodities. We continue to see headwinds in an oversupplied energy market, which tempers our expectations for a broad-based commodity investment to outperform other asset classes.
We see strength in Precious Metals as near-term policy uncertainties persist; however, we also favor Industrial Metals in anticipation of stronger economic growth in the U.S. and improvement in some overseas economies.
|
2025 latest* |
Year-end 2026 target |
|
|---|---|---|
|
West Texas Intermediate crude ($ per barrel) |
$59 |
$65 – $75 |
|
Gold ($ per troy ounce) |
$4,239 |
$4,500 – $4,700 |
|
Sources: Wells Fargo Investment Institute and Bloomberg *All latest numbers from Bloomberg as of November 28, 2025. Targets for 2026 are based on forecasts by Wells Fargo Investment Institute as of December 9, 2025 and provide a forecast direction over a tactical horizon. Forecasts, targets, and estimates are based on certain assumptions and on our current views of market and economic conditions, which are subject to change. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results. |
Alternative investments
Alternative investments may enhance portfolio resilience by offering diversification through reduced exposure to short-term market volatility, and structural features may help investors maintain long-term discipline through market cycles.
Flexible hedge-fund strategies may provide valuable tools for navigating today’s complex and rapidly evolving investment environment. These strategies aim to mitigate risk, capitalize on macroeconomic shifts, and complement traditional equity allocations with differentiated sources of return.
Alternative investment strategies are not suitable for all investors, but select strategies available to qualified investors may further reduce exposure to short-term market noise and offer smoother return profiles, especially in volatile environments.
We expect tariffs to pressure U.S. economic growth in the coming months before more positive forces kick in late in 2025 from tax cuts, lower short-term interest rates, and improved purchasing power from oil-price declines and solid real (inflation adjusted) income growth.
We think 2025 offers long-term investors an opportunity for increased exposure to high-quality U.S. assets, which we see as well-positioned to outperform developed- and emerging-market assets.
|
2025 target |
2026 target |
|
|---|---|---|
|
U.S. GDP growth |
1.0% |
1.8% |
|
U.S. CPI inflation1 |
2.0% (Oct.) |
2.6% (Dec.) |
|
U.S. unemployment rate2 |
3.5% (Dec.) |
5.3% (Dec.) |
|
Source: Wells Fargo Investment Institute. Targets for 2025 and 2026 are based on forecasts by Wells Fargo Investment Institute as of June 10, 2025, and provide a forecast direction over a tactical horizon through 2026. Average percent change from the same period a year ago unless otherwise noted. GDP = gross domestic product. CPI = Consumer Price Index. Forecasts, targets, and estimates are based on certain assumptions and on our current views of market and economic conditions, which are subject to change. An index is unmanaged and not available for direct investment.
|
Fixed income
Fixed income
We expect the bond market to remain sensitive to policy announcements and economic developments, especially around the trajectory of inflation and global demand for U.S. fixed-income securities. We also expect bond investors to pay close attention to congressional budget negotiations, mainly for a sense of whether federal-budget deficits will increase.
We see the most attractive tradeoff between yield and interest-rate risk in U.S. Intermediate Term Taxable Fixed Income. Also, we continue to favor exposure to investment-grade credit risk, particularly in high-quality investment-grade corporate bonds and mortgage-backed and asset-backed securities, which we expect should continue to provide attractive income opportunities.
|
Year-end 2025 target |
Year-end 2026 target |
|
|---|---|---|
|
Federal funds rate |
4.00% – 4.25% |
3.75% – 4.00% |
|
10-year U.S. Treasury yield |
4.00% – 4.50% |
4.25% – 4.75% |
|
30-year U.S. Treasury yield |
4.25% – 4.75% |
4.50% – 5.00% |
|
Source: Wells Fargo Investment Institute. Targets for 2025 and 2026 are based on forecasts by Wells Fargo Investment Institute as of June 10, 2025, and provide a forecast direction over a tactical horizon through 2026. Forecasts, targets, and estimates are based on certain assumptions and on our current views of market and economic conditions, which are subject to change. An index is unmanaged and not available for direct investment. |
Equities
Significantly surpassing the equity-market highs reached early this year likely will be a challenge because of the tariff-related hit to consumer and business sentiment along with the imminent economic slowdown that we expect. Without a recession, we believe the risk of further equity-market downside — beyond lows reached in April — is likely limited while upside reward potential is significant by year-end 2026.
We view further periods of volatility as an opportunity to lean into equities to position for the gains we expect through 2026.
|
Year-end 2025 target |
Year-end 2026 target |
|
|---|---|---|
|
S&P 500 Index |
5,900 – 6,100 |
6,400 – 6,600 |
|
MSCI EAFE Index |
2,400 – 2,600 |
2,800 – 3,000 |
|
Source: Wells Fargo Investment Institute. All targets for 2025 and 2026 are based on forecasts by Wells Fargo Investment Institute as of June 10, 2025, and provide a forecast direction over a tactical horizon through 2026. Forecasts, targets, and estimates are based on certain assumptions and on our current views of market and economic conditions, which are subject to change. An index is unmanaged and not available for direct investment. |
Real assets
We believe that material commodity price corrections have created attractive opportunities to position for an improved economic environment later this year and into 2026. We expect improved U.S. economic conditions starting later in 2025 to drive demand growth for commodities, especially areas that are more cyclically sensitive.
We prefer investors rotate toward cyclical sectors that could benefit from an improving macro environment such as Energy or Precious Metals.
|
Year-end 2025 target |
Year-end 2026 target |
|
|---|---|---|
|
West Texas Intermediate crude ($ per barrel) |
$60 – $70 |
$60 – $70 |
|
Gold ($ per troy ounce) |
$3,000 – $3,200 |
$3,400 – $3,600 |
|
Source: Wells Fargo Investment Institute. Targets for 2025 and 2026 are based on forecasts by Wells Fargo Investment Institute as of June 10, 2025, and provide a forecast direction over a tactical horizon through 2026. Forecasts, targets, and estimates are based on certain assumptions and on our current views of market and economic conditions, which are subject to change. An index is unmanaged and not available for direct investment. |
Alternative investments
Alternative investments
Qualified investors who add alternative strategies to a portfolio of traditional stocks and bonds may build portfolios resilient to periods of elevated market volatility and may capitalize on periods of market dislocation.
We favor increasing exposure to flexible strategies that have historically participated in upward-trending markets much more than they have done in declining markets.
If economic growth rebounds and policy uncertainty fades as we expect, we favor allocating to strategies that we anticipate can adapt to changing markets such as Equity Hedge – Directional, Relative Value – Long/Short Credit, and Macro – Discretionary.
The 2026 Outlook from Wells Fargo Investment Institute offers more insights and guidance for investors including:
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Download the full reportGet more WFII research and analysisInvestment Grade bonds - A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such as Standard & Poor’s, use different designations consisting of upper- and lower-case letters ’A‘ and ’B‘ to identify a bond’s credit quality rating. ’AAA‘ and ’AA‘ (high credit quality) and ’A‘ and ’BBB‘ (medium credit quality) are considered investment grade. Credit ratings for bonds below these designations (’BB‘, ’B‘, ’CCC‘, etc.) are considered low credit quality, and are commonly referred to as ”junk bonds“.
An index is unmanaged and not available for direct investment.
Consumer Price Index (CPI) produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services. leads the global economy through 2025.
MSCI EAFE Index (Europe, Australasia, Far East) Index is a free float-adjusted market capitalization index designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.
S&P 500 Index is a market capitalization-weighted index composed of 500 widely held common stocks that is generally considered representative of the US stock market.
Forecasts, estimates, and projections are not guaranteed and are based on certain assumptions and views of market and economic conditions which are subject to change.
All investing involves risks, including the possible loss of principal. There can be no assurance that any investment strategy will be successful and meet its investment objectives. Investments fluctuate with changes in market and economic conditions and in different environments due to numerous factors, some of which may be unpredictable. Asset allocation and diversification do not guarantee investment returns or eliminate risk of loss. Each asset class has its own risk and return characteristics, which should be evaluated carefully before making any investment decision. The level of risk associated with a particular investment or asset class generally correlates with the level of return the investment or asset class might achieve.
Stock markets, especially foreign markets, are volatile. A stock’s value may fluctuate in response to general economic and market conditions, the prospects of individual companies, and industry sectors. International investing has additional risks including those associated with currency fluctuation, political and economic instability, and different accounting standards. This may result in greater share price volatility. These risks are heightened in emerging and frontier markets. Investing in small- and mid-cap companies involves additional risks, such as limited liquidity and greater volatility.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.
Cash alternatives typically offer lower rates of return than longer-term equity or fixed-income securities and provide a level of liquidity and price stability generally not available to these investments. Some examples of cash alternatives include: Bank certificates of deposit; bank money market accounts; bankers’ acceptances, federal agency short-term securities, money market mutual funds, Treasury bills, ultra-short bond mutual funds or exchange-traded funds and variable rate demand notes. Each type of cash alternatives has advantages and disadvantages which should be discussed with your financial advisor before investing.
Investments in fixed-income securities, including municipal securities, are subject to market, interest rate, credit, liquidity, inflation, prepayment, extension, and other risks. Bond prices fluctuate inversely to changes in interest rates. Therefore, a general rise in interest rates can result in a decline in the bond’s price. High-yield fixed-income securities are considered speculative, involve greater risk of default, and tend to be more volatile than investment-grade fixed-income securities. Municipal securities may also be subject to the alternative minimum tax and legislative and regulatory risk, which is the risk that a change in the tax code could affect the value of taxable or tax-exempt interest income.
U.S. government securities are backed by the full faith and credit of the federal government as to payment of principal and interest if held to maturity. Although Treasuries are considered free from credit risk they are subject to other types of risks. These risks include interest-rate risk, which may cause the underlying value of the bond to fluctuate.
Mortgage-related securities are subject to prepayment and call risks in addition to the risks of investing in debt securities. Call risk is the risk that the issuer will redeem the issue prior to maturity. This may result in reinvestment risk, which means the proceeds will generally be reinvested in a less favorable environment. Changes in prepayments may significantly affect yield, average life, and expected maturity.
Sector investing can be more volatile than investments that are broadly diversified over numerous sectors of the economy and will increase a portfolio’s vulnerability to any single economic, political, or regulatory development affecting the sector. There is increased risk investing in the Industrials sector. The industries within the sector can be significantly affected by general market and economic conditions, competition, technological innovation, legislation, and government regulations, among other things, all of which can significantly affect a portfolio’s performance. Real estate investments have special risks, including possible illiquidity of the underlying properties, credit risk, interest-rate fluctuations, and the impact of varied economic conditions. Risks associated with the Technology sector include increased competition from domestic and international companies, unexpected changes in demand, regulatory actions, technical problems with key products, and the departure of key members of management. Technology and Internet-related stocks and smaller, less-seasoned companies, tend to be more volatile than the overall market. Utilities are sensitive to changes in interest rates, and the securities within the sector can be volatile and may underperform in a slow economy.
Alternative investments, such as hedge funds, private equity/private debt, and private real estate funds are speculative and involve a high degree of risk that is appropriate only for those investors who have the financial sophistication and expertise to evaluate the merits and risks of an investment in a fund and for which the fund does not represent a complete investment program. They entail significant risks that can include losses due to leveraging or other speculative investment practices, lack of liquidity, volatility of returns, restrictions on transferring interests in a fund, potential lack of diversification, absence and/or delay of information regarding valuations and pricing, complex tax structures and delays in tax reporting, and less regulation and higher fees than mutual funds. Hedge fund, private equity, private debt, and private real estate fund investing involves other material risks, including capital loss and the loss of the entire amount invested. A fund’s offering documents should be carefully reviewed prior to investing.
Hedge fund strategies, such as Event Driven, Equity Hedge, Global Macro, Relative Value, Structured Credit, and Long/Short Credit, may expose investors to the risks associated with the use of short selling, leverage, derivatives, and arbitrage methodologies. Short sales involve leverage and theoretically unlimited loss potential because the market price of securities sold short may continuously increase. The use of leverage in a portfolio varies by strategy. Leverage can significantly increase return potential but create greater risk of loss. Derivatives generally have implied leverage, which can magnify volatility and may entail other risks, such as market, interest-rate, credit, counterparty, and management risks. Private capital investments are complex, speculative investment vehicles not appropriate for all investors. They are not subject to the same regulatory requirements as registered investment products and engage in leverage and other aggressive investment practices. There is often limited (or even nonexistent) liquidity and a lack of transparency regarding the underlying assets.
Digital assets are not a physical currency, nor legal tender. Investors must have the financial ability, sophistication/experience and willingness to bear the risks of an investment, and a potential total loss of their investment. An investor could lose all or a substantial portion of his/her investment. Digital assets have limited operating history or performance. Digital Assets are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not backed or supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional fiat currencies.
Real assets are subject to the risks associated with real estate, commodities, and other investments and may not be appropriate for all investors. The commodities markets, including investments in gold and other precious metals, are considered speculative, carry substantial risks, and have experienced periods of extreme volatility. Investing in a volatile and uncertain commodities market may cause a portfolio to rapidly increase or decrease in value, which may result in greater share price volatility. Investments in commodities may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity. Products that invest in commodities may employ more complex strategies, which may expose investors to additional risks.
There are special risks associated with an investment in real estate, including the possible illiquidity of the underlying properties, credit risk, interest-rate fluctuations, and the impact of varied economic conditions. Other risks associated with investing in listed real estate investment trusts (REITs) include the use of leverage, unexpected reductions in common dividends, increases in property taxes, and the impact to listed REITs from new property development.
Global Investment Strategy (GIS) and Global Securities Research (GSR) are divisions of Wells Fargo Investment Institute, Inc. (WFII). Global Asset Allocation is a unit within Global Investment Strategy (GIS). WFII is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.
The information in this report was prepared by the Global Investment Strategy (GIS) division of WFII. Opinions represent GIS’ opinion as of the date of this report; are for general informational purposes only; and are not intended to predict or guarantee the future performance of any individual security, market sector, or the markets generally. GIS does not undertake to advise you of any change in its opinions or the information contained in this report. Wells Fargo & Company affiliates may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report.
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