Author Topic: 5k in fidelity, which index funds?  (Read 1900 times)

texastumbleweed

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5k in fidelity, which index funds?
« on: July 26, 2016, 08:22:49 AM »
I know it isn't a ton but I'm about to allocate that money I posted about recently.  Our roth IRA's are in fidelity.  Is it best to just put it in an index fidelity has with no $8 fee like IVV or buy one from Vanguard.  And which ones should I think about?  (I've previously only invested in common stocks so very little experience with index funds.  I love individual stocks, but I'm trying to be more responsible.)

Thanks

seattlecyclone

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Re: 5k in fidelity, which index funds?
« Reply #1 on: July 26, 2016, 08:27:58 AM »
The iShares index ETFs are essentially as good as the Vanguard ETFs. There's not enough difference between them to justify paying extra trading fees for Vanguard.

As to which funds, how does your investment policy statement say you should divide your money? What percentage of stocks, what percentage of bonds? What percentage of those things should be US-based vs. international? You need to decide that first. Once you have done so, the particular fund choice isn't that hard.

texastumbleweed

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Re: 5k in fidelity, which index funds?
« Reply #2 on: July 26, 2016, 08:32:01 AM »
I don't have a policy about bonds vs. stocks.  Right now there is only 3k in it (long story, the rest is in my roth ira.) and that 3k is 100% american stocks.  We are self employed.  I'd rather not do bonds, so probably looking for 30% international and the rest US.  Maaaaaaybe emerging markets is someone has a strong thought on a particular fund.

seattlecyclone

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Re: 5k in fidelity, which index funds?
« Reply #3 on: July 26, 2016, 08:41:47 AM »
I don't have a policy about bonds vs. stocks.  Right now there is only 3k in it (long story, the rest is in my roth ira.) and that 3k is 100% american stocks.  We are self employed.  I'd rather not do bonds, so probably looking for 30% international and the rest US.  Maaaaaaybe emerging markets is someone has a strong thought on a particular fund.

Sounds like you just started writing your policy! Looks like ITOT is a total US stock market fund, so you could put 70% in there. For the international piece, IXUS is a total international stock fund, which should have a mix of developed and emerging market stocks (mostly developed market since those countries have higher market caps).

TheStachery

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Re: 5k in fidelity, which index funds?
« Reply #4 on: July 26, 2016, 09:37:15 AM »
FSTMX is pretty close to VTSAX.  If your young, i would dump it all in to the total market index fund.  No fees to trade it and low overall management fees.

Choices

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Re: 5k in fidelity, which index funds?
« Reply #5 on: July 26, 2016, 10:10:10 AM »
FSTMX is pretty close to VTSAX.  If your young, i would dump it all in to the total market index fund.  No fees to trade it and low overall management fees.
+1
If you keep it in a Fidelity fund you can make contributions as often as you want without fees. If you buy a non-fidelity fund, you'll pay $8 for each transaction.

Telecaster

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Re: 5k in fidelity, which index funds?
« Reply #6 on: July 26, 2016, 10:35:34 AM »
I don't have a policy about bonds vs. stocks.  Right now there is only 3k in it (long story, the rest is in my roth ira.) and that 3k is 100% american stocks.  We are self employed.  I'd rather not do bonds, so probably looking for 30% international and the rest US.  Maaaaaaybe emerging markets is someone has a strong thought on a particular fund.

One thing to consider is Fidelity's Four In One Index FFNOX.  It is composed of the S&P 500, the extended market (mid and small cap), international stocks, and US bonds.  Expenses are little higher than if you just do it yourself, but you don't have to rebalance, either. 


Radagast

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Re: 5k in fidelity, which index funds?
« Reply #7 on: July 26, 2016, 08:52:56 PM »
I don't have a policy about bonds vs. stocks.  Right now there is only 3k in it (long story, the rest is in my roth ira.) and that 3k is 100% american stocks.  We are self employed.  I'd rather not do bonds, so probably looking for 30% international and the rest US.  Maaaaaaybe emerging markets is someone has a strong thought on a particular fund.

One thing to consider is Fidelity's Four In One Index FFNOX.  It is composed of the S&P 500, the extended market (mid and small cap), international stocks, and US bonds.  Expenses are little higher than if you just do it yourself, but you don't have to rebalance, either.
I like this option too. This is a pretty sweet fund for the 0.11% expense ratio, and the allocation is great. The only slight concern might be slightly higher taxes than a pure stock index fund due to bond yields and rebalancing. Still a great choice though.