Recommendations of Fidelity No-Load, Low Cost Index Funds

[redtail]

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

 

[rescueme]

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...

 

[Bestwifeever]

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?

 

[steelyman]

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.

 

[redtail]

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.

 

[easysurfer]

Did a look at Fidelty's website. Here's a link that should lead to various index funds available:

Fidelity Investments

 

[ERD50]

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

 

[Bestwifeever]

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.

 

[easysurfer]

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."

 

[Jake46]

Be sure to look at the low cost Spartan funds:

Fidelity Investments

 

[MasterBlaster]

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

 

[eytonxav]

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

 

[Dimsumkid]

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.

 

[LOL!]

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.

 

[FIREd]

I would also recommend the Fidelity Spartan index funds. I own FSIIX and FSTMX.

 

[Animorph]

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.

 

[Nords]

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.

 

[nwsteve]

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.
Nwsteve

 

[hlfo718]

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.

 

[frayne]

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.

 

[steelyman]

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.

Since you were asking for specific suggestions, here's a stab at it - of course, the final choice is yours and you should check it out further... I'm no expert!

Stocks: FSTMX (+ FSIIX if you want int'l)
Bonds: FBIDX (+ FINPX if you want TIPS)
Cash: FSLXX

 

[redtail]

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

I wanted to thank everyone for their input, this will give me a good start picking out my index funds. Thanks.

 

[ShokWaveRider]

I wanted to thank everyone for their input, this will give me a good start picking out my index funds. Thanks.

Are you going to DCA in or lump sum it? I ask because I have similar requirements but ALL my investments are currently in MM. I have been convince by this lot here that I have to do something and am also trying to choose between Fidelity and Vanguard. I have no money in either at the moment so it would be a transfer to cash then into some investments. I am just a little concerned about the volitility in the market at this time.

SWR