Fidelity S&P 500 Index Fund Recommendation

[explanade]

Um, well, there's the Fidelity 500 Index Fund...low ER open-ended mutual fund. That's a pretty open-ended question, though.

In my Fid accts I balance between FXAIX (S&P 500) and FXNAX (bond index).

What are the ERs of those?

 

[explanade]

I am going to discontinue my Fidelity Portfolio Advisory Service for my IRA, what is a good Index fund to put the IRA into at Fidelity? I am 54.

Does the mean you will lose the free Turbo Tax if you go from advisory to their index funds?

 

[OldShooter]

They are not ignoring half the world with the S&P500, these are mostly world class companies operating across the globe. I would not want 50% of my stock portfolio to be under accounting rules in place in China, Hong Kong and Brazil or Japan.

We have had this discussion before. "50% of my stock portfolio to be under accounting rules in place in China, Hong Kong and Brazil or Japan" is impossible in a total international fund. Here is VGTSX.

Note that Europe, the UK, and North America account for about 50% of the holdings and China is a single digit percent. Japan is significant but I don't know of any reason to be concerned about Japanese accounting.

If VGTSX doesn't assuage your paranoia, look at an EAFE index fund where you will have an even smaller number of emerging market investments where you might be paranoid.

I have asked before but don't remember the answer. Have you traveled internationally? Roughly how many countries? We've been to about 40 countries and, from that experience, your concerns are not even a radar blip for me.

 

[Running_Man]

We have had this discussion before. "50% of my stock portfolio to be under accounting rules in place in China, Hong Kong and Brazil or Japan" is impossible in a total international fund. Here is VGTSX.

Note that Europe, the UK, and North America account for about 50% of the holdings and China is a single digit percent. Japan is significant but I don't know of any reason to be concerned about Japanese accounting.

If VGTSX doesn't assuage your paranoia, look at an EAFE index fund where you will have an even smaller number of emerging market investments where you might be paranoid.

I have asked before but don't remember the answer. Have you traveled internationally? Roughly how many countries? We've been to about 40 countries and, from that experience, your concerns are not even a radar blip for me.

I was in charge of accounting for major US divisions for companies that underwent mergers with various US and Foreign companies. What is allowed and estimates placed under rules is vague enough under GAAP, under IFRS and other accounting standards you get what the company wants you to get. I have no issue with anyone that wants to be truly international. International passive funds have made this investing easy and low pressure for foreign companies. If one likes them I understand the passive index mentality and arguement for it. when you get annual reports and the flow of fixed assets doesn't even match for a top 40 company in Europe I don't think I'd want to invest,

 

[target2019]

So the S&P 500 is then a subcategory/aka sector of the total US market Russell 3000, Wilshire 5000 indices and of the ACWI. My point exactly. I agree.

Actually, you're agreeing with a point you created, not what I typed.
A sub-category is not a sector. I haven't been able to find a reference that supports your position that an index is a sector, or sub-sector.
Nothing else to add on the subject. TTFN.

 

[OldShooter]

... you get what the company wants you to get.

Like Enron and Theranos?

You have some background and reasons to be paranoid, fine. (Did you travel much, then? Did you actually see a lot of fraud?) I am less concerned and I do not read a lot of concern from people who are active in international investing. So we are about 50% international. Basically all sectors, all feasible places.

Another factor that muddies the water is the long-term fate of the dollar. IMO this could swamp any accounting irregularity issues. To the extent that the dollar eventually declines, non-us investments (and TIPS) will shine. And IMO there are some fundamental reasons that the dollar will eventually decline. For example, everybody hates the dollar as the world's reserve currency.

 

[Dtail]

what are the ers of those?

fxaix - 1.5 bps
fxnax - 2.5 bps

 

[Dtail]

Go look at his actual post! He even quoted you! So I would say he noticed.

I understand that, but you missed my point, so let's move on.

 

[audreyh1]

What are the ERs of those?

0.015% and 0.025% - super low.

 

[Running_Man]

Like Enron and Theranos?

You have some background and reasons to be paranoid, fine. (Did you travel much, then? Did you actually see a lot of fraud?) I am less concerned and I do not read a lot of concern from people who are active in international investing. So we are about 50% international. Basically all sectors, all feasible places.

Another factor that muddies the water is the long-term fate of the dollar. IMO this could swamp any accounting irregularity issues. To the extent that the dollar eventually declines, non-us investments (and TIPS) will shine. And IMO there are some fundamental reasons that the dollar will eventually decline. For example, everybody hates the dollar as the world's reserve currency.

Fraud is a criminal level of conduct that is usually determined after an estimate a company took aggressively does not work out. Before Theranos bombed out it was a ten billion dollar company that had managed to get multiple high level investors that one persons look at brought down. The less light that is shined on companies the more untoward behavior that will go down.

Enron was undone totally by estimates in accounting of the profitability of contracts over their life. These estimates are far more lenient under IFRS and international accounting. Enron had a full contingent of auditors under their wing. The special purpose vehicles that Enron used are really a subset of what I have seen done casually for profit manipulation in international accounting. One firm is founded in one country as holding technology patents,another the manufacturing facility, a third a shipping company, a fourth a financing company, a fifth an importer a 6th an exporter, another company to hold real estate holdings another to offer computer services and develop software for businesses that allows the software and labor of implementations to be capitalized instead of expensed if it was all under one roof is a short subset of what I have seen done.

Enron and the collapse and bankruptcy of the Arthur Anderson partners is what makes US accounting so much more demanding.

 

[bingybear]

Only investopedia can solve this.

Searched for what is a sector? selected "sector ETF"

Result

What is a Sector ETF
A sector exchange traded fund (ETF) invests in the stocks and securities of a specific sector, typically identified in the fund title.

What is a Sector
A sector is an area of the economy in which businesses share the same or a related product or service. It can also be thought of as an industry or market that shares common operating characteristics. Dividing an economy into different sectors allows for more in-depth analysis of the economy as a whole.

I was wondering how VTI would be a sector since it is a slice of the world market.

One could use sector funds in a prescribed amount and re-balance when they get out of balance too far. Not really a risky play since you would not be guessing the hot sector of the moment, but really having broad market diversity.

But yes, more work than holding SCHB

 

[steelyman]

Fidelity S&P 500 Index Fund Recommendation

The discussion seems to have veered from the thread topic of S&P 500 Fidelity fund recommendations.

The current considerations about “what are sectors” makes me think of the Callan Periodic Table of Investment Returns, as discussed in a recent thread.

S&P defines its own (US) sector breakdown, Callan has a more global view.

 

[Qs Laptop]

What is a Sector
A sector is an area of the economy in which businesses share the same or a related product or service. It can also be thought of as an industry or market that shares common operating characteristics. Dividing an economy into different sectors allows for more in-depth analysis of the economy as a whole.

Precisely.

For example, I am invested in Fidelity's Medical Devices and Technology sector fund. Also am into the Defense and Aerospace sector fund. This idea that the S&P 500 is a sector is strange.

 

[audreyh1]

The discussion seems to have veered from the thread topic of S&P 500 Fidelity fund recommendations.

The current considerations about “what are sectors” makes me think of the Callan Periodic Table of Investment Returns, as discussed in a recent thread.

S&P defines its own (US) sector breakdown, Callan has a more global view.

Those listed in the Callan table are mostly asset classes, not sectors, although real estate is also a sector.

 

[bingybear]

The discussion seems to have veered from the thread topic of S&P 500 Fidelity fund recommendations.

The current considerations about “what are sectors” makes me think of the Callan Periodic Table of Investment Returns, as discussed in a recent thread.

S&P defines its own (US) sector breakdown, Callan has a more global view.

Yes it got off early (2nd reply). While I didn't start the diversion, I did contribute to the diversion.

I would suggest IVV. I've owned it for a few years. IIRC the ER is 0.04%. Not Likely the lowest ER, but as and ETF tax characteristics. A MF in a taxable account can distribute capital gains when others withdraw assets and cause the MF to sell some of the assets that makes the MF realize embedded gains that are then distributed to current MF holders. This is less likely to happen in some types of fund like large broad indexes, but can happen.

I do not hold MF in taxable account for this reason.

In the past Blackrock had a document that showed how to add two style box ETF in a given proportions that would make IVV+ 2 other fund approximate ITOT. When I did this with mine I had IVV with significant embedded gains.

At Fido I would use IVV partially due to commission free trades.

 

[Another Reader]

Fraud is a criminal level of conduct that is usually determined after an estimate a company took aggressively does not work out. Before Theranos bombed out it was a ten billion dollar company that had managed to get multiple high level investors that one persons look at brought down. The less light that is shined on companies the more untoward behavior that will go down.

Enron was undone totally by estimates in accounting of the profitability of contracts over their life. These estimates are far more lenient under IFRS and international accounting. Enron had a full contingent of auditors under their wing. The special purpose vehicles that Enron used are really a subset of what I have seen done casually for profit manipulation in international accounting. One firm is founded in one country as holding technology patents,another the manufacturing facility, a third a shipping company, a fourth a financing company, a fifth an importer a 6th an exporter, another company to hold real estate holdings another to offer computer services and develop software for businesses that allows the software and labor of implementations to be capitalized instead of expensed if it was all under one roof is a short subset of what I have seen done.

Enron and the collapse and bankruptcy of the Arthur Anderson partners is what makes US accounting so much more demanding.

And that is precisely why I will extract a share of the GDP of other countries through US-based companies that operate under GAAP.

 

[murphearlyretirement]

Monday I am going into Fidelity to meet with my financial advisor and end my Fidelity Portfolio Advisory Service. I appreciate all of the advise I have received on this thread, I now have the courage to do this. My managed IRA's current positions are listed below. Once I cancel the ADVISORY SERVICE can I leave the allocations as they are or do I have to move it?
FDRXX**
AMFAX
AQMNX
EGRAX
FAUDX
FCSAX
FERGX
FILFX
FIONX
FLCPX
FPCIX
FPIOX
FRGXX
FSAMX
FSCFX
FSGFX
FVSAX
PCRIX

 

[targatom2019]

OP, here is a pretty good article from Molly Fool regarding FIDO ZERO FEE

ZERO.....https://www.fool.com/investing/2019/01/06/read-this-before-buying-fidelitys-zero-fee-funds.aspx