I have two 401k accounts with Fidelity. The one from my former employer (into which I can no longer add funds) is about 1/3 each Spartan US EQ Index, MSIF Mid-cap Growth I, and Victory Dvrs Stk A. It’s down about 43% this year. Since I hate dealing with money, I was lazy and let Fidelity decide where to put the money from my current employer. I’m 100% in FID Freedom 2025, which is down almost 36% this year.
With the stock market at historically low levels, and with a history of stocks providing excellent returns over time, and with a couple of decades before retirement, I’m thinking now is a good time to invest in stocks; perhaps an index fund. But as I said, I hate dealing with money. I have no idea how to invest.
Is anyone familiar with Fidelity investment products, and knowledgeable enough to suggest which ones to use? (Yes, I know the risk is mine. But if you’re investment-savvy, what would you choose?)
I don’t like index funds much. They seem boring to me. If I were you (and I kinda am), I’d bet on certain sectors. That’s how to invest. As to what to invest in, I have a track record of being pretty terrible at it. Despite that, energy should do well, methinks.
Personally, I shifted to social lending. At first, I thought it was risky, but then the market crashed. I’ve learned that there’s no such thing as “safe”. The returns are high, I have a(n unproven) strategy that lowers my risk relative to the entire pool of loans, and it doesn’t take long to recoup most of your money, should something go wrong. As an added bonus, it’s really really fun. I use Lending Club. PM me if you want my username.
But that’s just me talking. It’s probably not worth the risk in the long run. Then again, I’ve made 5% on it this year and -50% in the market, and numbers don’t lie.
The standard “if you don’t know what you’re doing, do this” advice is to invest constant amounts in very low expense ratio index funds, spaced out by some fixed amount of time, consistently, no matter how the markets are doing; rebalance the funds once an year.
You can roll the 401k from the previous employer into an IRA. That will give you many more options than are available in the 401k.
I’d ask Fidelity if they offer a complimentary portfolio consultation. My firm does. You tell the financial consultant your plans and goals and they will help design a portfolio.
Second, call your brokerage and ask for investment training materials or read the Motley Fool stuff. If you don’t know much about investing it is time to learn. If your broker won’t give you any investment training materials, call Schwab and ask them, they should do it though you may have to play Potential Schwab Client*. If you trust others for free advice on what to buy you are going to get what you pay for. Also note that the brokers make their money off of you**. If you don’t know much about investing it makes it way easier for them to take your money.
Anyway, you can get a decent idea of how to invest with a little bit of time.
Third, pay attention to your portfolio at least monthly.
Slee
*Schwab has a set of basic investing books that are easy to understand and they used to give them away free to potential investors. The books were pretty good at covering the basics and hit on things like dollar cost averaging and how to interpret the stocks numbers along with different investment strategies.
**The broker makes his money off of you so some will try and take as much of your money as they can while still keeping you as a client. This isn’t true for most brokers but enough do it so that you have to pay attention. Sad but true.
Even though I’m a diehard Vanguard fan I’ve heard good things about Fidelity’s Spartan 500 Index Fund. If you are already in that and you want to own more stocks why not just invest more money into that fund? Seems like it would be much easier then opening an account with another brokerage.
Ah, yes. I should have made that clear. I don’t have money to invest. What I want to do is to move my current 401k and future contributions and employer matching funds to something ‘better’ (and I’m assuming now is a good time to buy stocks). Since my 401k is through my employer, I need to stay with Fidelity.
Johnny, to repeat an old refrain, you need to first invest in an education and then go from there. There’s really no way to shortcut this. The Motley Fool (www.motleyfool.com) has good resources (online and offline–er, books) to learn about investing.
I know you’re asking a more targetted question, but this is one of those issues where you shouldn’t trust anyone else’s advice.