Hello all. I am set up with a Fidelity 401k through work (no matching from employer, no other investment choices aside from Fidelity unfortunately) and currently have 100% of contributions going into a year-2035 target retirement fund. Like a dumbass I went years without putting hardly anything into the 401k until recently, and only have a fraction of what I ought to have in there after all the money I've made the past 10-12 years.  Also, my rate of return is a pathetic 1% over the past year or some shit like that. I expect to contribute my maximum pre-tax allowance of $18k this year and would like to see a little more return on that money. Anyone familiar with Fidelity's investment choices who could offer some advice, it'd be much appreciated. Thanks!

Similar question(s) asked/answered here.

While I no longer invest with Fidelity (consolidated accounts at Vanguard) investment choices are pretty much generic.

The primary question you have to answer is how long do you have until retirement?  While the answer if a function of what other investments you may or may not have, generally speaking, your investment horizon sets your asset allocation:  the longer you will leave the money invested, the higher the percentage in stocks should be.  In the long run, stocks will outperform other assets so unless you are going to need (withdraw/spend) your 401(k) funds "soon" (1-5 years or so) you should put it (all) in stocks.

Simplest answer:  100% S&P500 and forget about it.

Want to assume a little more risk for a chance at greater return?  Put a small percentage (5-15%) in their developed international fund.

Willing to accept even more risk for a chance of even greater return?  Put a little (5% or so) in their emerging market fund.

Note that with the international choices you will incur exchange rate (currency) risk but, like so many things, in the long run it's a push.

If you think you can time the economy to a degree (i.e. it's a safe bet we are not in a growth cycle right now, at least not a robust one) shift some from the S&P to growth and/or small caps when the economy starts to (really) improve (i.e. when a Republican takes the WH; J/K...sort of).

All the retirement date funds do is, as the retirement date approaches, shift more and more of your funds from stocks (S&P500 or equivalent) to bonds (government securities).  It's not a bad concept but IMO they are generally too conservative, investing far too much in bonds.

Yeah, I've noticed the retirement fund isn't very aggressive. I'm eligible to retire with full pension/benefits in 2027 but will only be 49y/o then, so I plan to hang around til at least 2035. Used to have all my money in the general income fund, which also only gained around 1%. So I moved everything into the retirement target fund, hoping to just get a little bit more out of it, but so far it's just been a wash. I will look into shifting 10-15% or so into one of those other funds. I probably ought to be asking guys I work with how their 401k's are doing and how they've got their investments spread around. Sure wish we had more choices than Fidelity.

Is this plan through Fidelity proper or Fidelity Advisor?






 

That's just like asking here:  you'll get every answer in the book.

FWIW, IMHO, there will be way more funds available from Fidelity than what you ever need.

As stated:  you could go 100% S&P500 and you're going to do better than 75% of the money runners out there.  If you can max out for the next 20 years at 10% or so (long term average of the S&P) you'll be doing great.  In reality, that is all you can expect to do:  earn the market return.

The idea isn't to stress about your investments nor even to worry/monitor them unless it's a pass time you enjoy.  If not, set it and forget it.

Those of you talking about the S&P 500 fund are talking about VFNIX?


It might be a good choice for the Target Retirement thread I started earlier as my additional investment to dump the extra cash that I can't put into my IRA with.

There are a few issues with a target date fund.

1. It adjust not based on you risk tolerance but by your age. You may be more conservative than the fund is or you may be more aggressive.
2. Fees are higher
3. Managers aren't always the best

The target Funds could still work for you by controlling how aggressive.
If you plan to retire in 2030 but want to keep aggressive then place it in the 2040 Fund.
Or the opposite if wanting to be more conservative.

I have some $$ in Fidelity funds.  I've done very well.....like 40% return.   But the stuff I'm in is called "most aggressive".  
Go on their website and do research.   You can get all of the info you want on their funds.   Ranked every way you can imagine.  

does your company's custodial 401k arrangement with Fidelity provide the "BrokerageLink" option?

basically, Fidelity BrokerageLink is a sub-account within your 401k.  you fund this sub-account with money already inside your 401k.
from within this sub-account you can buy pretty much ANYTHING you could purchase via a regular (taxable) brokerage account.
this in turn opens up your investment spectrum way past just the dozen or so funds that your 401k program offers.  

in my case i used BrokerageLink to purchase ETFs and so on which were more strategic/specific than the regular options in my 401k.

my employer has since changed our 401k custodian but the new company offers this very same brokerage-account-within-401k feature.

ps
the only thing you can't do inside a BrokerageLink sub-account is short sell; there would be no way to add funds if you had to cover.  

ar-jedi

ps
you should also get yourself familiar with Morningstar's free "Instant Xray" analysis tool.

see for example,
http://www.ar15.com/forums/t_1_133/583439__ARCHIVED_THREAD____401k_advice___Updated_to_include_ticker_symobols.html&page=1#i9858441
and
http://www.ar15.com/forums/t_1_133/1122005__ARCHIVED_THREAD____IRA_not_making_dukey__AR_Jedi_help___Update__last_post.html&page=1#i26309009
and
http://www.ar15.com/forums/t_1_133/586834__ARCHIVED_THREAD____These_are_my_401k_investment_options__help_me_throw_a_dart_at_the_dart_board_.html&page=1#i9970672

ar-jedi

1. yes you are right you can use which ever date fund to get your allocation correct. What is more conservative though? Holding money market finds and bond funds? I would think that current fed policy and interest rate environment would want to be considered instead while trying to generate income and preserve principle than following the  markowitz theory blindly. I assume when you say more conservative you mean less risk, given that there are a myriad of risk involved when fixed income investing when rate's are how they are and you are buying paper in a mutual fund, closed end fund, etf and even UIT's to a certain extent.

2. The fidelity target date funds are .78%, arf.com normally has a stroke over that.

3. I brought that up because Fidelity TD funds are "a fund of funds" which is Ironic because arf.com is hardcore modern port theory. There is a slot of active management going on in the target date funds. So, while Fidelity does a good in area of the "style map" they are going to suck hard in the others. So, in Fidelity's case the managers make a lot of decisions.

It goes back to what I was saying.  if you like active management, don't be lazy do some research and find out who is always top manager in their respective asset class.

Stop comparing non-index to index.
Fidelity Freedom® Index 2035 Fund Symbol: FIHFX 0.16% net exp (0.25% gross)
https://fundresearch.fidelity.com/mutual-funds/summary/315793802

Using the index version the fees are much lower.

When using index funds, you completely ignore everything else besides the allocation based on your efficient frontier. If that's for you, no problems.