What fidelity fund?

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sizzlinshred
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What fidelity fund?

Post by sizzlinshred »

I'm 24 and I have $2,500 (minimum amount) in my fidelity account. Now I am completely clueless as to what fund would be of interest to me. I'm looking for something in the area of 20-25% bonds, 75-80% stocks? Thank you
livesoft
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Re: What fidelity fund?

Post by livesoft »

FFNOX might be something to look at.

Otherwise shift to Vanguard where there are more obvious choices of passively-managed low-expense ratio funds of index funds such as the Target Retirement series. The semi-equivalent funds at Fidelity are actively-manged and have higher expense ratios; they are called Freedom Funds.
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Call_Me_Op
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Re: What fidelity fund?

Post by Call_Me_Op »

Fidelity also offers 65 iShares ETFs that have no trading fee (if held for at least 30 days).
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Laura
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Re: What fidelity fund?

Post by Laura »

What is the money for and in what type of account will it be held? That makes a difference. If in taxable then you need to think about tax efficiency. Before doing taxable investing make sure you are maximizing contributions to your 401k and an IRA (traditional or roth).

Laura
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gerrym51
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Re: What fidelity fund?

Post by gerrym51 »

at your age a total equity fund
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steve r
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Re: What fidelity fund?

Post by steve r »

livesoft wrote:FFNOX might be something to look at.

Otherwise shift to Vanguard where there are more obvious choices of passively-managed low-expense ratio funds of index funds such as the Target Retirement series. The semi-equivalent funds at Fidelity are actively-manged and have higher expense ratios; they are called Freedom Funds.
+1 At a young age you need little else. Vanguard Target funds are better than FFNOX. I would steer clear of Freedom Funds.

It is not a total equity fund ... but has 14% bonds to smooth out some ups and downs. You will get some debate on this site on the merits of 100% stocks (I suggest a few bonds like are in FFNOX).

FFNOX (four in one index fund) owns four index funds and is reasonably well diversified.
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nisiprius
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Re: What fidelity fund?

Post by nisiprius »

See http://www.bogleheads.org/wiki/Fidelity

Does your Fidelity account allow for the purchase of ETFs, specifically

65 Commission-Free iShares® ETFs?

If so, one starting point might be a Three-fund portfolio, consisting of:

Core S&P Total U.S. Stock Market (ITOT) for U.S. stocks, say 55%,
Core MSCI Total International Stock (IXUS) for international stocks, say 20%.
Core Total U.S. Bond Market (AGG) for bonds, say 25%

I'm basing that on your statement that you want to be 20-25% bonds, and the numbers I wrote down make 27% of your stocks international. Everyone is going to want to put their spin on it and tweak those percentages, so that's just a starting point to think about.
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Costanza
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Re: What fidelity fund?

Post by Costanza »

It's great that you're 24 and starting to invest. The difference between Vanguard and Fidelity is almost nonexistent for your purposes. Consider staying with Fidelity and buying a three-fund portfolio, rebalanced annually or every time you put more money in:

56% total US stock (ITOT)
24% total international stock (IXUS)
20% total US bond market (AGG)

I own all these ETFs, and they are good, broadly based indexes, have very low expense ratios, and are free to trade (as long as you don't sell within 30 days, but make sure this is true of your account). If you can place AGG in a tax-advantaged account, all the better.
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bertie wooster
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Re: What fidelity fund?

Post by bertie wooster »

First off, I would move this money into a Roth IRA (for 2013) if you haven't already and continue to save. You have until April to max out your 2013 contribution ($5500).

As far as Fidelity Funds - their Spartan Funds are excellent. I have them in my 403b and am very happy with them.
Topic Author
sizzlinshred
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Re: What fidelity fund?

Post by sizzlinshred »

This is for a ROTH Ira long term investment. 40 years
Laura
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Re: What fidelity fund?

Post by Laura »

I would use only the Spartan Four in One Index at Fidelity. However, I actually suggest moving the IRA to Vanguard and investing in a Target Retirement Fund. Vanguard is owned by the people who invest in their funds so they return all profits in the form of lower costs. Fidelity and many other companies need to generate profit for their owners and the investors are not the owners. Since you are early in your investing lifecycle I suggest starting with a great company. You might enjoy this article from Morningstar entitled Vanguard Dominates the Fund Industry Again.

Laura
The views presented are my own and not necessarily those of the Department of State or the U.S. Government.
Topic Author
sizzlinshred
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Re: What fidelity fund?

Post by sizzlinshred »

Thanks guys I really like the suggestions you gave me.

I'm going to start investing in US total stocks, bonds, and international stocks now. Can't beat those expense ratios!
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