Fidelity Investments?

Question

My company is matching 3% . Im putting in 13% bgi bigpath 2030 Im 45 years old. Im using Fidelity.What is a broad based index fund? Will this add more money or will it sink? Please explain!!!

Answer 1

Fund is invested in stocks similar to index it's based on...safe,but you could stand to take more risk at 45..

Answer 2

Okay, I'm going to make a lot of assumptions here, so bear with me.

Your company matches 3%, which I believe means they'll add a sum of money (or equivalent in company stock) equal to 3% of what you put in.

I've never heard of "bgi bigpath 2030," but oftentimes when there's a year in the title, it represents bond sets to mature that year. In 2030, you'll be about 68.

13%? Don't know what that represents. It could be how it's performed lately, or how it's performed average over some number of years.

Fidelity is just a company that you give your money to and hope they make you more money than their fees and taxes rob you of. They might.

A broad-based index fund is a mutual fund where many people put in their money, and the fund manager uses it to buy a large number of stocks (broad-based) that are similar to an index.

An index is sort of a barometer of how "the market" is doing. For example, the Dow Jones Industrial Index measures a group of industrial companies, and how their stocks are doing.

Your index might be of something else. It could even be an index across a wide range of different sectors (different types of companies that do different things).

Add more money? You can add as much as the law and your budget allow. Day-to-day, "the market" will go up, down, or sideways (no change). Very intelligent people say that the general direction is up. But beware of people who say something "always goes up," because they're blinded by greed.

Also beware of people who say, "I'll never put money in THAT again"... they've gotten burned, and now they're afraid.

I hope I've been some help, but I really don't understand your question.

Answer 3

Fidelity has a 2030 Freedom Fund to match a 2030 retirement age. Is that what you are referring to? If so it is a very well diversified mutual fund. And in my opinion more diversified than a broad based index fund. The main problem with broad based index funds is that they are capitalization weighted so 20% of your assets are tied up in 10 stocks. Not all index funds are this way but the more popular ones are, namely those based on the S&P 500. This is not good for diversity of investments. Another problem with index funds is that they are U S company centric, so if you are invested in just one you have no exposure to foreign markets. The 2030 fund is a good choice if you do not wish to be responsible for picking and choosing mutual funds yourself. Stick with it.

Answer 4

The Fidelity Freedom 2030 Fund is a fund-of-funds. The manager takes your money and invests in 22 underlying Fidelity funds for you. For example, 10% goes to the Growth Fund, 10% to the Value Fund, 5% to the European Fund, 10% to the Bond fund, etc. So, you get full diversification with using just one fund. This specific fund is given its name because it is designed for people who will begin retirement around the year 2030. The manager will gradually make the fund more conservative as you move closer to the year 2030.

The downside of a target-date fund is that someone else is deciding your stock to bond ratio. In many cases, the assets of the 2030 fund are apporpriate for people retiring in this year. However, this may not necessarily be the best asset allocation for you. You will need to decide this for yourself. You are free to pick a Fidelity Freedom fund that is not your retirement date, but has the asset allocation you desire.

The Fidelity Freedom funds are pretty good, although I prefer Vanguard's target-date funds. The Fidelity funds have no load and a 0.77% annual expense ratio, significantly lower than average. Not bad.

An index fund is one in which the manager simply buys the stocks that are listed in an index. (An index is a list of stocks that a research company makes, and then follows their price movement and dividends to track their returns. The index becomes a standard, a measure of average market activity.) An index fund simply replicates the exact stocks in an index, making no attempt to "outsmart" the market, content to receive average returns. However, because of their lower costs, index funds beat about 80% of actively managed fund over a period of 10 years or longer, as research has shown.

A broad based index fund invests in a large index, like the S&P500 or the WIllshire 5000, or the Morgan Stanly Total Market Index. This is in contrast to a narrow index fund that might invest in only Technology stocks or REIT stocks.

The easiest way to invest in the U.S. Stock market is to use a total stock market index fund, one that holds >3,000 stocks and gives you a capital-weighted mix of large, medium, and small cap stocks. All of your domestic stock needs are met with just one fund. I use a total stock market index fund whenever possible for my retirement accounts.

An index fund will replicate the movement of the overall market. If the market falls, it will feel the full brunt of that. However, when the market does well, it will do as well as the market. As John Bogle says, "A broad based index mutual fund is the only way to ensure your fair share of the market's return."

For more info on index funds and investing, see my free downloadable book at http://www.invest-for-retirement.com

Answer 5

The broadest based index is Fidelity's total market index. This index includes big caps, small caps, growth, and value stocks and it has a very low expense ratio. The fund reflects the stock market, it will go up and down as the stock market. When the market is down the stocks in the index that pay dividends will reinvest those dividends at a lower stock price so that when the market eventually rebounds, and it always does, the reinvested portion will inflate in worth.

In addition as you dollar cost average into the market with your and your company's contributions, you will buy in at lower prices when the market is down, so in effect, you are buying low and someday will sell high!

The fund is Fidelity Spartan Total Market Index Inv (FSTMX).
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Answer 6

Fidelity is very reputable (as any big firm would be). I used to keep my 401K there, but moved it when I changed jobs. they're fine. I can't tell you anything about your fund tho. Although it seems to be a life-cycle type fund, and you expect to retire somewhere around 2030-ish. Those funds seem pretty good for people who don't want to keep up on individual funds. My 401k company, John Hancock, also has those. they were just added to our plan last month. I'm sticking with picking my own tho. I think I can do a little better.

Answer 7

I would invest in 30% in small/medium cap funds and 30% in large cap funds, 25% in large cap international funds, plus 15% in emerging markets. If your plan offers these, pick the ones with the lowest expense ratio, but also check their historic returns.

Answer 8

I had Fidelity with my last employer. Go to their website, very easy to use and one of the better ones for information. You could spread some of that investment out to a little higher risk for more potential gain. I would, I'm 47.