I need advice for investment

[cyuanwang]

Hi everyone, I’m facing a dilema since I pulled some of my investments out of the stock market when Dow was at around 26k points last year, so I have missed good chuck of the recovery since then. Now I have good amount of cash that need to be invested. I’m seeking long-term investments so I need mutual funds and stock recommendations as I don’t want to hire a financial adviser. To make things easier I do have an account at Fidelity, so any fund available there would help. I also understand that market is quite volatile right and an adjustment can happen any time. I guess I gave up trying to time the market and need to invest my cash. Another important information is I don’t need this money in the next 10 years.
Thanks in advance,
CYW

 

[cyuanwang]

Additionally I’m not greedy as long as I can beat inflation and make small gains I’d be happy. Beside I do believe in diversification and value investing. Thanks.

 

[street]

I know of others here that cashed in sitting on cash, and have the scenario as you have. I hope you can get some answers but I have learned that somethings doing nothing is better then doing something.

Right now markets (DJIA) are steady to upward direction but portfolio is not doing very good. It maybe a good time to get in and hope others chime in that can give their views.

Good luck.

 

[SnowballCamper]

Man, that sucks. My short answer is to pick the target date fund for when you think you'll need it, and don't sell before then.

You could of course do your own two or three bucket portfolio, but you'll have to decide on an Asset Allocation, and stick with it!

If you have an asset allocation, that you choose, then there is one, and only one thing to do when the market goes crazy. Rebalance to your specified asset allocation. When you do this you will be selling appreciated assets and/or buying depreciated assets (relative to what they were when you started). Just do this, KISS. Good Luck!

 

[cyuanwang]

I know of others here that cashed in sitting on cash, and have the scenario as you have. I hope you can get some answers but I have learned that somethings doing nothing is better then doing something.

Right now markets (DJIA) are steady to upward direction but portfolio is not doing very good. It maybe a good time to get in and hope others chime in that can give their views.

Good luck.

Hi street, you just made me feel better. Thanks!

 

[cyuanwang]

Man, that sucks. My short answer is to pick the target date fund for when you think you'll need it, and don't sell before then.

You could of course do your own two or three bucket portfolio, but you'll have to decide on an Asset Allocation, and stick with it!

If you have an asset allocation, that you choose, then there is one, and only one thing to do when the market goes crazy. Rebalance to your specified asset allocation. When you do this you will be selling appreciated assets and/or buying depreciated assets (relative to what they were when you started). Just do this, KISS. Good Luck!

Thanks! You mean target date funds available at Fidelity? I guess it rebalances over time too. I want to invest in a short list of funds that has good diversification.

 

[Sunset]

OP - How will you feel if after you invest the money, the market sinks 10...20....30....40 percent ?

Will you pull it out or leave it alone. ?

These are important considerations as you don't want to be the person that buys high... sells low.... buys high again..... sells low again.....

The tricky part of asking yourself this is, that it's easy to think cool now, but when the market is falling, many tend to feel very emotional and then act.

To answer your question I'd put a 20% in VXUS, 80% in VTI.
I'd avoid bond funds for now as they will have a lot of headwind and low payouts (IMHO) for a few years as interest goes up a few points.

 

[RetireeRobert]

Additionally I’m not greedy as long as I can beat inflation and make small gains I’d be happy. Beside I do believe in diversification and value investing. Thanks.

Since you say you believe in diversification and value investing, and are looking for a long-term ten year holding period, how about Fidelity's Value factor ETF: FVAL

It syncs with your stated investing beliefs.

I would "not" put in your entire investment amount all at once. Rather would dollar cost average in over a period of at least six months, perhaps once a month in six equal purchase amounts.

https://screener.fidelity.com/ftgw/etf/goto/snapshot/snapshot.jhtml?symbols=FVAL

 

[jurgs01]

Not much is cheap right now without risk. I'd say oil (like the XLE ETF) is about fair value. Certain tech companies could get more reasonable in the next few months. Mining has been flat, but had a big run up before that could have led to a short term overvaluation.

Nothing is without risk when you are trying to buy when we are at record highs on a lot of our indices.

If I had to pick today I would do Qualcomm, Taiwan Semiconductors, Franklin Resources, B&G Foods, BP, Coupang, Honda Motor Company, Kellogg, SunOpta, AT&T, Toronto Dominion, Target, Verizon and XLE.

I'm not an investment advisor. Do your own research.

 

[njhowie]

Consider FGRIX - Fidelity Growth and Income fund. It has a good mix of growth + income and has a successful history of performance.

 

[jurgs01]

Consider FGRIX - Fidelity Growth and Income fund. It has a good mix of growth + income and has a successful history of performance.

Other than being a little overweight MSFT, I like their value diversification. Good recommendation.

 

[donheff]

I don't know enough to advise you on which investments to make but you need to decide and then be disciplined. Your actions show the dilemma of market timing. You went to cash and then missed the rebound. Now, if you get back in, will you panic if the market drops 20% in a couple of months and sell again? Then rinse and repeat?

You need to evaluate the appropriate AA for your circumstances and then stay put. Maybe a target date fund will work. If you are going to panic at the next downturn there is little reason to get back in now.

 

[cyuanwang]

Many thanks to all of you. Just to be clear, I intend to get back in gradually and not at once. And I won’t pull out if market tanks 20-30% probably add some more. I really appreciate the funds and stock recommendations, I will study them and take action but not in a hurry as market is quite overvalued right now. Maybe doing nothing for little longer is not a bad decision. I’m open for more advices. [emoji106]

 

[The Cosmic Avenger]

My favorite long-term position at Fidelity is FXAIX, the S&P500 index fund, and I balance it with the FXNAX bond fund now that I'm getting close to retirement. Both have very low expense ratios, and I haven't found a significantly better combination of stability and performance.

 

[Lsbcal]

Many thanks to all of you. Just to be clear, I intend to get back in gradually and not at once. And I won’t pull out if market tanks 20-30% probably add some more. I really appreciate the funds and stock recommendations, I will study them and take action but not in a hurry as market is quite overvalued right now. Maybe doing nothing for little longer is not a bad decision. I’m open for more advices. [emoji106]

There is a disconnect here. You pull out and then cannot seem to find the right pricing to get back in. Clearly your ideas of market values are not working.

I personally think the market is fairly valued. In recent days we've had a small sell off. Just go ahead and buy some now. Or put it all in. Don't wait for your idea of market value to pan out. My advice FWIW.

 

[Dash man]

Many thanks to all of you. Just to be clear, I intend to get back in gradually and not at once. And I won’t pull out if market tanks 20-30% probably add some more. I really appreciate the funds and stock recommendations, I will study them and take action but not in a hurry as market is quite overvalued right now. Maybe doing nothing for little longer is not a bad decision. I’m open for more advices. [emoji106]

I’ve been putting some money recently into some Schwab ETFs: SCHB, a broad market fund. SCHA, a small cap fund. And SCHF, an international stock fund. They are very low fee ETFs. I’m also going to be starting a corporate bond ladder next month. The bonds will be kept until maturity and will then reinvest for hopefully higher yields. If nothing else, they will provide some stability or ballast as some call it.

 

[Ramen]

If I had a Fidelity account and a bunch of cash to invest for 10+ years, I would drop every penny into Fidelity Balanced (FBALX) all at once, today, and let it ride. A dead simple 9% to 10% a year historically, with no timing or rebalancing necessary.

 

[yakers]

If I had a Fidelity account and a bunch of cash to invest for 10+ years, I would drop every penny into Fidelity Balanced (FBALX) all at once, today, and let it ride. A dead simple 9% to 10% a year historically, with no timing or rebalancing necessary.

Probably a good choice, DWs & my Roths are in VBIAX for many, many years, has done really well just leaving it alone and we expect to leave it to our sons unless an unplanned emergency. But these do feel like strange times and the bond component 'may' not perform as it has in the past, but who knows? Gotta pick something and will not know the best except retroactively.

 

[FREE866]

It really comes down to your investment time frame and your tolerance for volatility. If your time frame is even as short as 10 -15+ years it doesn't matter what you think the market might do in the next year or 2.



If you need or want growth you will want a heavy allocation to stocks which in this case SPY ( S and P 500 index ETF), IWM ( R2000 small cap index ETF ) and whatever FIdelity's version of a large cap ETF will do you fine.

 

[Ramen]

DWs & my Roths are in VBIAX for many, many years, has done really well just leaving it alone and we expect to leave it to our sons unless an unplanned emergency. But these do feel like strange times and the bond component 'may' not perform as it has in the past, but who knows? Gotta pick something and will not know the best except retroactively.

Right! If only I could get back all the time and mental energy I've wasted hemming and hawing over just the right fund or allocation. The 60-40 balance is good enough for life, and if I had to do my 30 years of investing all over again, I'd choose VBIAX and nothing else -- can't beat those super low fees. I'm using a managed 60-40 fund with higher fees, but it still keeps up with Fidelity Balanced and I'm happy with it. Investing is the Turtle vs. the Hare, and we all know which one wins in the end.

 

[38Chevy454]

Being a 10 year timeframe, I would go heavy on diversified stock funds. Maybe 80% stocks and 20% bonds, you can change the allocation to fit what your risk tolerance fits. The key here is you said it was 10 year or longer money, so the goal is to get decent returns and stay ahead of inflation. Some good Fidelity choices have already been suggested, here are some more that have low or zero mgmt fees on the fund. Remember that any fund mgmt fees are reducing your potential return by that amount:
1) FZROX, total market, zero fee
2) FZIPX, extended market, zero fee
3) FSSNX, small cap index, .026% fee
4) FSMDX, mid cap index, .025% fee
5) FTIHX, total international index, .07% fee
6) FZILX, international index, zero fee
7) FNILX, large cap index, zero fee
8) FXNAX, US bond index, .025% fee
9) FBIIX, international bond index, .06% fee


The nice thing about the blended funds like FBALX or the target date funds is they keep the allocation at the set value range without you needing to do anything.

 

[Athermos4u]

Hi everyone, I’m facing a dilema since I pulled some of my investments out of the stock market when Dow was at around 26k points last year, so I have missed good chuck of the recovery since then. Now I have good amount of cash that need to be invested. I’m seeking long-term investments so I need mutual funds and stock recommendations as I don’t want to hire a financial adviser. To make things easier I do have an account at Fidelity, so any fund available there would help. I also understand that market is quite volatile right and an adjustment can happen any time. I guess I gave up trying to time the market and need to invest my cash. Another important information is I don’t need this money in the next 10 years.
Thanks in advance,
CYW

Perhaps invest 30-50% in an Index Fund now, and dollar cost average back in over the next 6-12mos so that you will be able to react if there is a big move down in the mean time?

 

[SnowballCamper]

Thanks! You mean target date funds available at Fidelity? I guess it rebalances over time too. I want to invest in a short list of funds that has good diversification.

I just looked at a Fidelity Freedom fund and the expense ratio was almost twice Vanguard.

Given your past decision to sell, and not get back into the market for years, I suggest you spend more time on what your asset allocation will be (do all the online asset allocation calculators you can find and digest the results) and to write down your strategy (what will you do) during the next market correction. It's more important that your asset allocation not change than that it be precisely the correct one. Here, good enough means that you don't change your allocation when the market tanks.

Choosing the best fund is useless if you panic sell. Choosing an average index fund (but low or zeros cost) and rebalancing to a fixed asset allocation instead of trying to time the market will result in capturing most of market gains.

Read this if you haven't yet https://www.bogleheads.org/wiki/Three-fund_portfolio

 

[Out-to-Lunch]

I just looked at a Fidelity Freedom fund and the expense ratio was almost twice Vanguard.

There is a separate series of Fidelity Freedom INDEX Funds that have reasonable ERs (~0.12). I am not pushing Fido in particular, but there are acceptable choices there.

I concur with all of Snowball's other points.

 

[The Cosmic Avenger]

There is a separate series of Fidelity Freedom INDEX Funds that have reasonable ERs (~0.12). I am not pushing Fido in particular, but there are acceptable choices there.

I concur with all of Snowball's other points.

Correct, that's part of why I recommend FXAIX, the ER is 0.015%, and FXNAX, the bond fund I prefer, is 0.025%.