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Recommendations of Fidelity No-Load, Low Cost Index Funds
Old 07-12-2012, 08:28 AM   #1
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Recommendations of Fidelity No-Load, Low Cost Index Funds

I want to thank you guys for a wealth of information. I posted a couple of times last month for the first time about some doubts that I had with my finiancial advisior. Overwhelmly you guys said to let my financial advisior go, which I'm doing this week, and to read The Investor's Manifesto, and The Four Pillars of Investing both by William Bernstein. Also to read Common Sense on Mutual Funds 10th Anniversary Edition by John Bogle. I read all three. I see both of these guys mainly dwell on Vanguard Funds, which I totally understand, but I have all my assets in Fidelity, that's where my advisior did his business thru. I do not want to move them because I have a 72T which I have one more year left to complete, as most of you know, this is a complicated instrument that I don't want to get wrong. So I'm looking for some recommendation from Fidelity.

Here is some information about me and my wife. I retired at 55 from a company I was at for 35 years. They sent everything to China, but offered me a lump sum which I took and I based my 72T on.

My portfolo consists of a little over 1 million in a tax-shelted IRA.
My wife stills works making $60,000 a year mainly because of the health insurance. She will receive a defined pension of $2400 a month if she retires at 65. She also contributes to a 401K which has a balance of $128,000.

My age is 59 and I do not work, my wife is 58. I draw out $24000 a year per my 72T. The only liability that we have is our mortgage which will be paid off in 3 years. We have $25,000 in cash in case of emerginces.

As for my asset information that I am thinking:
25% Stocks
45% Bonds
30% Cash

I'm kind of the person that whats to keep it simple. 3 or 4 funds is fine with me. Any help would be appreciated. Thanks
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Old 07-12-2012, 08:34 AM   #2
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Just an opinion concerning 100% VG or FIDO (or any other company). You don't have to go with only one company.

I/DW have ours split (roughly 50/50) between VG/FIDO, due to the funds available at both, along with available on-line forecasting tools.

You don't have to "marry" just one company, unless you are truly driven to do so due to some personal "like".

Just our POV...
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Old 07-12-2012, 09:13 AM   #3
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Although all of our stuff is at Vanguard, Fidelity has an equally good reputation. I imagine someone at Fidelity will be happy to help you decide which funds would be best for the asset allocation you've come up with--did they give you any recommendations yet?
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Old 07-12-2012, 09:21 AM   #4
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Vanguard pioneered indexing and low cost funds and has done a great job of educating the public of the benefits. Fidelity caught on a while ago and now offers many similar funds, some with lower expense ratios. You should be fine with either.
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Old 07-12-2012, 09:26 AM   #5
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Originally Posted by Bestwifeever View Post
Although all of our stuff is at Vanguard, Fidelity has an equally good reputation. I imagine someone at Fidelity will be happy to help you decide which funds would be best for the asset allocation you've come up with--did they give you any recommendations yet?
They did not give me any recommendations, but I didn't ask either. I remember in one of the books either Berstein or Bogel, that the fund companies will try to push some hot funds, which are not necessarly the best. That's why I wanted to ask you guys.
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Old 07-12-2012, 09:31 AM   #6
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Did a look at Fidelty's website. Here's a link that should lead to various index funds available:

Fidelity Investments
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Old 07-12-2012, 09:32 AM   #7
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Quote:
Originally Posted by redtail View Post
As for my asset information that I am thinking:
25% Stocks
45% Bonds
30% Cash

I'm kind of the person that whats to keep it simple. 3 or 4 funds is fine with me. Any help would be appreciated. Thanks
I'm good with simple, but that stock AA is low by many measures. I'd suggest you do some FIRECALC runs with that AA versus the default 75% equities (or anything between 50-90% for some added data points). In general, the withdraw rate will need to be cut considerably with that low a stock AA, to achieve a comparable success rate over 30-40 years.

But if your spending rate and portfolio size supports a low WR, and it helps you sleep at night, that should work. What will your retirement spending be?Just be aware of the trade offs.

-ERD50
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Old 07-12-2012, 09:33 AM   #8
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Originally Posted by redtail View Post
They did not give me any recommendations, but I didn't ask either. I remember in one of the books either Berstein or Bogel, that the fund companies will try to push some hot funds, which are not necessarly the best. That's why I wanted to ask you guys.
Understood. I would hope Fidelity wouldn't do this, but good point to watch out for it.
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Old 07-12-2012, 09:39 AM   #9
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They did not give me any recommendations, but I didn't ask either. I remember in one of the books either Berstein or Bogel, that the fund companies will try to push some hot funds, which are not necessarly the best. That's why I wanted to ask you guys.
Remember, if you stick with index funds and someone tries to push a hot fund to you, just say, "I prefer to keep it simple and stick to indexes, thanks but no thanks."
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Old 07-12-2012, 09:44 AM   #10
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Be sure to look at the low cost Spartan funds:

Fidelity Investments
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Old 07-12-2012, 10:37 AM   #11
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here's the list of all of Fidelity's index funds:

Fidelity Investments

You (the OP) didn't specify how you wanted to divide assets between large and small caps. foreign and domestic equity, and foreign and domestic bonds.

Perhaps a Burns-eske couch potato-like allocation (ie 3-part Margarita or 4-square) for your money. Take a look at the website below. Burns uses Vanguard funds but you can easily find a Fidelity equivalent using the fidelity link above. The couch potato models are (arguably) as good as anything.

AssetBuilder Inc. - Registered Investment Advisor- Couch Potato Cook Book
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Old 07-12-2012, 10:43 AM   #12
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This link may provide a bit broader view of their various index funds:

Fidelity Investments


Edit - sorry, I didn't see MasterBlasters post when I posted this, which I think provides essentially the same
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Old 07-12-2012, 10:44 AM   #13
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I think you should check with Fidelity and ask them for a 1 on 1 session, in person or by phone. Based on your asset levels with them, you qualify for their highest level - Private Client Group. I just had a portfolio checkup recently and was shocked to get multiple recommendations to pick mutual funds away from Fidelity funds. I asked my rep and they have no qualms making recommendations outside of their own funds.
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Old 07-12-2012, 10:53 AM   #14
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Here's a great list of Fidelity Spartan index funds with Vanguard equivalents:
Fidelity - Bogleheads

I use Fidelity Spartan index funds in my 401(k).

Fidelity has no qualms recommending non-Fidelity funds because they get lots more 12b-1 fees that way than if one invested in their low-expense-ratio, passively-managed Spartan index funds.
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Old 07-12-2012, 11:00 AM   #15
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I would also recommend the Fidelity Spartan index funds. I own FSIIX and FSTMX.
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Old 07-12-2012, 12:17 PM   #16
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You can also try ETF's, which are mostly index funds. You can buy any Vanguard ETF at Fidelity. Fidelity has quite a few commission-free ETF's as well, though they are not from Vanguard. For index funds, the only thing you really have to look at is the index they are tracking and the expense ratio. The lower expense ratio is better. Tracking error also may be an issue in a few cases, so you can always chart the total return (including distributions) of several funds to see which is doing the best job. You should be fine at Fidelity.
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Old 07-12-2012, 01:24 PM   #17
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Quote:
Originally Posted by redtail View Post
They did not give me any recommendations, but I didn't ask either. I remember in one of the books either Berstein or Bogel, that the fund companies will try to push some hot funds, which are not necessarly the best. That's why I wanted to ask you guys.
You could sort their funds by expense ratio, but our daughter has just been using their Spartan index funds. At Fidelity, you can't get much lower than their Spartan choices.

You're eligible for their "Private Access" client services. Some of those guys are good, some not so much. A few posters here have had trouble with hard sell.
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Old 07-12-2012, 02:53 PM   #18
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You're eligible for their "Private Access" client services. Some of those guys are good, some not so much. A few posters here have had trouble with hard sell.
We are on our fourth Private Client Advisor in 15 years and none of them have been "hard sell". Every once awhile, they will do a soft sell on the latest and greatest thing that Fido is offering but a simple "no thank you", takes care of it. Most recent example was being asked why I was not interested including any Single Premium Annuity in our retirement planning (we were reviewing their Retirement Income Planner tool which by the way is excellent and Vanguard has NOTHING that IMHO even comes close to its convenience and choices). Simply told the rep we preferred to do our own portfolio management and she has never brought it up again.
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Old 07-12-2012, 03:05 PM   #19
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Have you done a detailed budget to see if your retirement income will cover your living expenses? If it is not sufficient I think you should read up on single premium immediate annuity. Is probably the only annuity I would buy personally.

As for index funds, can't go wrong with Vanguard or Fidelity.
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Old 07-12-2012, 03:10 PM   #20
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FYI, I have accounts with both Fido and Vanguard, and own index funds in both accounts. If you have over $100K to invest at FIDO you can get into a spartan index fund with an expense ratio of .07%, which is pretty darn good. Just my two cents and YMMV.
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