Big decision please help

Letj

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May 23, 2007
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Hi, I have about $200K that I would like to invest in mutual funds. Alternatively, I could pay off my mortgage but due to my relatively young age and tax bracket, I prefer to put it in the market. I would like to put about half in Fidelity Balanced Fund (FBALX) and the other half in Fedility Value Fund (FDVLX). What do you think about these two funds? Is there too much overlap? Could you also suggest for me some good funds that you've had success with (yes, I know past performance is no predictor of future performance and you are not giving advice in the capacity of an expert so I wont rely on it to make a decision without my own research). Thank you so much. I've been a member of the board for about 1.5 years but I had to change my name because when they changed the site I sent several e-mails requesting my password which I had forgotten and got no response.
 
Just did a quick check as to the breakdown on M*:

Cash 4.9%
US Stock 71.8%
Foreign Stock 5.78%
Bonds 16.7%


Seems to be light on the foreign.

It is also 50% Large-cap, 40% Midcaps and only 10% Small caps.

Whether this is the right portfolio, is your decision. Just wanted to lay out what you had chosen to make sure you are aware.

Personally, i would want more foreign exposure and more small cap exposure.

If you want to keep it this simple and stick with Fidelity, what about:

Fidelity Spartan Total Market (FSTMX)
Fidelity Spartan International Index (FSIIX)
Fidelity U.S. Bond Index Fund (FBIDX)

Something like 55% Total market, 25% Intl Index, 20% Bond fund?
 
Whether to pay off the mortgage has been rehashed here in the past, but I'd recommend investing the cash instead, if only for the increased flexibility. You can still pay off the mortgage in the future, if you feel you "need" to, from your investments, but in the meantime the cash is available for any expense.
 
Just did a quick check as to the breakdown on M*:
Personally, i would want more foreign exposure and more small cap exposure.

If you want to keep it this simple and stick with Fidelity, what about:

Fidelity Spartan Total Market (FSTMX)
Fidelity Spartan International Index (FSIIX)
Fidelity U.S. Bond Index Fund (FBIDX)

Something like 55% Total market, 25% Intl Index, 20% Bond fund?

DW has all her IRA money (>$200K) in exactly these 3 funds. I would endorse the recommendation and the advice to get some foreign stocks exposure
 
Thanks so much for the replies. I know I can count on you guys. Olav, I would research the funds you posted.
 
I should also add that your expense ratio would go from 0.64% down to 0.14%.

I'll also echo REWahoo's point, think about the tax implications of the funds. For instance, the bond portion should probably be in a tax-sheltered accounts if possible.
 
I'd recommend investing your money in a Fidelity money market account and then transferring a certain amount each month into these two funds. In this way you would be "dollar cost averaging" your investment, i.e., buying more shares at a lower price and fewer shares at a higher price. If you put all of your money in at once, you could be setting yourself up for a big shock if the market suddenly goes down 20%.
 
Send it to me I'll invest it for you. I've got this great, new plan....

Haha, just kidding.
 
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