Author Topic: Fidelity 401K - Diversify through Brokerage Link?  (Read 3100 times)

fatSquirrel

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Fidelity 401K - Diversify through Brokerage Link?
« on: September 02, 2014, 02:12:21 PM »
Hello,

I have a Fidelity 401K through my company that I max out.  I'm 33, so OK with a riskier allocation.
I currently have an 80/20 mix of Stocks/Bonds: VINIX and PTTPX

I'm looking to add some REITs or commodities to this portfolio - and welcome other sector suggestions.
(I have a Vanguard Roth that has a heavier weighting towards International value/growth - so don't want to include those here).

Ideally I'd like a 3 or 4 way fund allocation mix, but of course open to suggestions :D
The only way to add REITS or commodities is through the Brokerage Link?
Anyone else use this option if you have a Fidelity 401K??? 

Is my current allocation OK?  Thoughts?

Thank you!

Fuzzy Buttons

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Re: Fidelity 401K - Diversify through Brokerage Link?
« Reply #1 on: September 04, 2014, 08:43:10 AM »
My company's 401(k) has the Brokerage Link option with Fidelity, and I just activated it this month.  Our regular selection of funds only contained one Spartan fund.  It was the S&P 500 index fund with a .07% expense ratio.  A very good choice, but I wanted to diversify a bit more.

As far as I can tell, there are no specific fees involved in opening the Brokerage Link.  They will assign you a new account number and transfer over the money you request.  Once there, what you can buy may be limited by your particular 401(k) plan's options.  In my case, I just wanted to add some money to a Spartan international index and a Spartan total market (US) index.  I simply bought the mutual funds, since this is in a tax-deferred account and I won't be trading frequently or be concerned about distrbutions.  There's a Spartan REIT index fund, if that meets your needs.  I imagine it would be available in any 401(k) plan - but it's possible more esoteric options might not be.

Note that to get the lower expense ratio for the Spartan funds, you need at least $10k.  You then buy into the "Advantage" fund, which is a bit lower fee than the standard "Investor" funds.  Not a big difference, maybe .03%, but might as well take all you can get.

Edit, because I didn't write that very clearly.  Like any brokerage account, you will have transaction fees when you buy things.  It's just that if you are buying Fidelity mutual funds, the fee is $0.  Because that's what they want you to buy, of course.  Since that worked for me - no fees.  Your mileage may vary.  :)
« Last Edit: September 04, 2014, 10:10:21 AM by FuzzyButtons »

milesdividendmd

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Re: Fidelity 401K - Diversify through Brokerage Link?
« Reply #2 on: September 04, 2014, 10:10:49 AM »
I have brokerage link for my Fidelity 403B and I like it a lot.

I used it to gain access to Fidelity's spartan class funds of FSRVX (REIT) and FPMAX (emerging markets.)  The only hassle is that you have to pull your money out of the market for a day or 2 to transfer money from your standard account into brokeragelink account.

MD


DeepEllumStache

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Re: Fidelity 401K - Diversify through Brokerage Link?
« Reply #3 on: September 04, 2014, 10:13:24 AM »
My 401k offers Brokerage Link as well and I started shifting everything I was eligible to earlier this year.  The 0.07% fee funds are extremely wonderful.

beltim

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Re: Fidelity 401K - Diversify through Brokerage Link?
« Reply #4 on: September 04, 2014, 10:36:22 AM »
Hello,

I have a Fidelity 401K through my company that I max out.  I'm 33, so OK with a riskier allocation.
I currently have an 80/20 mix of Stocks/Bonds: VINIX and PTTPX

I'm looking to add some REITs or commodities to this portfolio - and welcome other sector suggestions.
(I have a Vanguard Roth that has a heavier weighting towards International value/growth - so don't want to include those here).

Based on these comments, I question whether you want any commodities in your portfolio.  Commodities aren't a sector, they're an asset class.  And they are an asset class with an expected real return close to 0.  They are sometimes used in an attempt to reduce portfolio volatility, but almost always at the expense of returns.  If you're truly okay with a riskier allocation and you have a long investing horizon, I don't think commodities would be useful to you.