Author Topic: $400k from home sales - Fidelity Funds?  (Read 354 times)

Unique User

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$400k from home sales - Fidelity Funds?
« on: April 12, 2021, 07:43:23 AM »
We have $400k we need to invest asap and are planning for the majority to go to Fidelity, with maybe some to Vanguard in VTSAX.   Variety of reasons for Fidelity, our Roths from years ago are there, 401ks were there, ESPP is there, so we've ended up with most of our money in that area and I just opened up a checking account with them since ATMs are free across the country and we'll be nomads for a while starting in August.  I do need to go through and figure out our allocations in different funds with them and rebalance.  DH didn't roll over his 401ks previously as we weren't sure if we needed to access prior to 59.5, but we've decided we don't.  I've listed our accounts below, but I'm getting confused by all the different index funds.
 Any thoughts on how to allocate across the various Fidelity indexes? 

New Taxable Account Money - $400k
My Trad IRA
My Roth IRA
DH Roth IRA
DH Last Company 401k (probably need to roll into DH Traditional IRA, but it's with Vanguard)
DH Last Last Company 401k (probably need to roll into DH Traditional IRA, but it's with Vanguard)

bacchi

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Re: $400k from home sales - Fidelity Funds?
« Reply #1 on: April 12, 2021, 08:00:17 AM »
Why asap?

First, what's your intended asset allocation? Do you have an IPS (Investment Policy Statement)?

Some suggestions:

FSKAX -- total US
FTIHX -- total international
BND -- Vanguard total bond


Frankies Girl

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Re: $400k from home sales - Fidelity Funds?
« Reply #2 on: April 12, 2021, 08:09:59 AM »
What's your asset allocation and what's your investment policy statement say first of all?

I have my whole portfolio at Fido, in about 6 different types of accounts and I treat them all as one big bucket, spreading my AA across them in what makes the most sense tax advantage wise.

If you have to put the entire 400k into a taxable account, then it definitely needs to be lean and mean as far as generating taxable events (less dividends/cap gains) and I believe Vanguard's ETF or mutual fund of the total stock market index fund (VTSAX) is going to be a slightly better holding than anything with FIDO and you technically can buy this at FIDO, but you will pay transaction fees since it's not a FIDO fund.

I hold the rough equivalent to VTSAX in my taxable account: Fidelity Total Market Index Fund (FSKAX). It isn't quite as tax efficient as VTSAX due to the proprietary patent that Vanguard holds (expiring in the next year or two I believe tho), but it is cheaper expense ratio, has no transaction fees/cost, and tracks the DOW more closely than VTSAX. It still is a wide range index fund but you'll see it move in a slightly different manner compared to VTSAX (I personally have no issues with it and very pleased).

There is another option for total stock/index at FIDO: Fidelity ZERO Total Market Index Fund (FZROX). This was introduced in the last few years and is a very good and attractive option, but word of warning: this is a proprietary fund. You absolutely can't buy this and then decide later on to move this fund/account containing it over to Vanguard if FIDO pisses you off for some reason. They will force you to sell all positions as they do not allow outside companies to buy/sell or hold their ZERO fund line. SO in the case of a taxable holding, ONLY consider this one if you are dead certain that you'll be happy with them for your investing lifetime, or be resigned to the fact that you may have a hellacious taxable event if you do need to move this down the road.

I've included a couple of links below that may help you figure out some ideas. But really, the main thing is to figure out your overall AA and then make sure that you rebalance the taxable stuff so it is streamlined/tax efficient, and distribute the non-efficient AA parts across the tax deferred accounts. This is another reason I LOVE having an AA/portfolio of only 3-4 funds. MUCH easier to figure it out when we're talking multiple accounts.


https://www.bogleheads.org/wiki/Fidelity
https://www.bogleheads.org/wiki/Tax-efficient_fund_placement

cool7hand

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Re: $400k from home sales - Fidelity Funds?
« Reply #3 on: April 12, 2021, 08:56:38 AM »
+1 on picking an asset allocation that fits your situation and goals and putting that money to work asap. We use Schwab as our platform because of the robust options, including Vanguard.

Shade00

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Re: $400k from home sales - Fidelity Funds?
« Reply #4 on: April 14, 2021, 05:58:25 PM »
You can buy Vanguard's ETFs with no commission and no fees at Fidelity, so I'd personally go with VOO (ETF equivalent of VFIAX) or VTI (ETF equivalent of VTSAX). You can also buy the excellent iShares competitors to Vanguard's ETFs, specifically ITOT, which is comparable to VTI. I'd prefer VOO just because 100% of the dividends issued in recent history have been qualified dividends, but VTI and ITOT have broader market coverage and fairly small non-qualified distributions.