How Many Funds?

[target2019]

Okay, the 2 funds are FXAIX, Fidelity's S&P 500 fund, and FLCOX, Fidelity's Large-Cap Index fund. Thanks for your help.

FLCOX: 843 holdings as of 6/30/2020 | 826 issuers as of 6/30/2020
More like Russell 1000 value. So you're duplicating the value stocks in S&P500 (FXAIX) and going through the mid/small US value universe.

 

[RandomPJ]

Good job. As I said, your instinct is correct. 24 funds is far too many. Things to watch for:

Don't let the Fido person sell you on multiple funds that hold basically the same stocks. If he claims this is diversification, find another Fido person.

Don't let the Fido person give you multiple funds where one will do. For example, buying a large cap fund, a midcap fund, and a small cap fund might well produce the same results as a total market fund. It depends on the proportions but you can check it in portfolio visualizer after the meeting.

ETFs and conventional mutual funds are the same thing to an investor. You aren't going to trade (you're not, are you?) so the trading advantage of an ETF is a don't-care. Focus on fees. Read this before you go: https://www.morningstar.com/articles/752485/fund-fees-predict-future-success-or-failure.html

When a Fido fund is proposed, ask how its fee compares to the equivalent Vanguard and Schwab fund fees. Fees are basically a street brawl right now, so you have to look carefully. I'm not saying Fido will be more expensive. After all they even have a couple of zero-fee funds, but none of these firms can be totally trusted to have the lowest fees.

Get the proposal, go home and think about it. Play with portfolio visualizer. It can't predict the future but it is a great way to compare history for funds and portolios -- and history is all we have. We don't have predictions.

Let us know how your meeting goes. Other forum members will be grateful to learn from your experience.

I think I will hold on for now, just add one ETF from the recommendations here. I have big funds with varied holdings, so I am not worried. I will meet with my non-Fidelity advisor when he opens up after covid. And no I'm not a big trader, lol. I pay those fees to let the managers worry!

 

[jazz4cash]

D

ETFs and conventional mutual funds are the same thing to an investor. You aren't going to trade (you're not, are you?) so the trading advantage of an ETF is a don't-care. Focus on fees. Read this before you go: https://www.morningstar.com/articles/752485/fund-fees-predict-future-success-or-failure.html

.

This is helpful to me. Thanks. I’m moving Fido 401k funds to Fido IRA. Conventional vs ETF is one of the things I considered. I did meet by phone with Fido rep. He seemed to defer to my plan of using 6 or so funds for now (with lots of overlap) and adding some individual bonds as CDs mature next year. I have inadvertently transitioned from mostly index to mostly actively managed funds. Fido is a good fit for me.

 

[OldShooter]

This is helpful to me. Thanks. I’m moving Fido 401k funds to Fido IRA. Conventional vs ETF is one of the things I considered. I did meet by phone with Fido rep. He seemed to defer to my plan of using 6 or so funds for now (with lots of overlap) and adding some individual bonds as CDs mature next year. I have inadvertently transitioned from mostly index to mostly actively managed funds. Fido is a good fit for me.

Glad to be of help. A suggestion:

With Fido, set up two accounts. One to hold exclusively your equity funds and one to hold fixed income. The problem with holding both type of assets in one account is what I call the "Kool-Aid Problem." When the green Kool-Aid and the red Kool-Aid are poured into the same glass it is impossible to know which was responsible for the resulting color. Same-o when you mix equties and fixed income it is impossible to know how each piece of your AA is doing.

When the equties are in a separate account, that account statement will give you total return monthly and there may be a quarterly summary as well. This may be called "time weighted return." I don't currently have a Fido account so I can't check, but most monthly and quarterly reports also give the time-weighted rate of return for one or more indices like the S&P and the Russell 3000. Maybe also the ACWI. With just eyeball compairisons you will be able to see how your managed funds are doing versus various views of the total market. If your Fido reports don't give you the total return of a few indices, you can get that date on the internet. Just be careful to get total return, dividends included, for comparison.

With the fixed income in a separate account, you have the same opportunity to make comparisons between the return you are getting and various measuring sticks. Unusually low retrurns and unusually high returns should be looked at. Low may be due to more conservative choices than you want and high may be due to lots of junk bonds that you may not want. But by measuring you can see this kind of thing.

But please don't let Fido talk you into putting the the green Kool-Aid and the red Kool-Aid into the same glass.