I've got around $400k in Fidelity IRAs that I need to put to work long term (20ish years). Should I drop it all into index funds like FBALX and FUSVX? Or is there something else I should be considering?

Maybe some % index and some in individual equities?

Thanks.

Someone with more knowledge of Fidelity's offerings than me could help you more than I but I know this. With a 20 year time horizon working for you, history says stocks are the best way to go. In the Fidelity family, Contra Fund and Low Priced Stock have historically been good. Whatever you choose stay with the lower fees. Personally I always did much better with individual stocks than mutual funds because the fees of mutual funds were simply too high. But to buy individual stocks yourself you must do work and not react like the herd when the powerful emotions of fear and greed rear their ugly heads. You also may want to dollar cost average into the market. Realistically it won't matter much over a 20 year period but if we get a 20% correction right after you go "all in" it will make you feel bad for awhile.

The two funds mentioned above are good because they have the same managers picking stocks for over 15 years in that same fund. In other words, they are the performance you look at.

Don't shy away from International stock funds. It is easy to do if you look at past performance, but practically all money managers have said that they feel international offers the best value and upside potential.

Fidelity offers a lot of funds to choose from. Pick ones that continually outperform their respective index. If 90% of the funds don't beat their index, then go for the 10% that do. That leaves at least 750 funds to diversify yourself.

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Someone with more knowledge of Fidelity's offerings than me could help you more than I but I know this. With a 20 year time horizon working for you, history says stocks are the best way to go. In the Fidelity family, Contra Fund and Low Priced Stock have historically been good. Whatever you choose stay with the lower fees. Personally I always did much better with individual stocks than mutual funds because the fees of mutual funds were simply too high. But to buy individual stocks yourself you must do work and not react like the herd when the powerful emotions of fear and greed rear their ugly heads. You also may want to dollar cost average into the market. Realistically it won't matter much over a 20 year period but if we get a 20% correction right after you go "all in" it will make you feel bad for awhile.

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I find that hard to believe (bolded part). If it is true, and you are a great stock picker, you should have been been a hedge fund manager or Wall Street guy and you would be worth a billion. Fees of mutual funds didn't cause you a problem unless you constantly bought and sold funds with a load.

FBALX is not an index fund. It is a fund that attempts to moderate risk by holding a mix of stocks and bonds. It is not a bad fund at all, though it really serves little purpose if you intend to manage your own diversification.

For a 20 year plan, I would:

- Split 100/0 or 90/10 stocks/bonds
- For the stock portion I'd choose 60% total market, 20% international, and 20% small caps

I like FSEVX over their S&P 500 index fund.
For small caps you could choose an ETF like IJR
For international you could choose a total market ETF like IEFA
You could include some emerging market via an ETF like IEMG

Personally I always did much better with individual stocks than mutual funds because the fees of mutual funds were simply too high.


This can be a true statement, but it's an extremely short time window here/there.... it's not buying and trading every day... and making money... Sometimes (with extreme market shifts) it's 'easy' to time the market... Say March '09 (financials).... July/Aug '09 (Vegas/Gaming stocks)....


But doing that over 10-30-50 years, aka Warren B, it becomes infinitely more challenging (seemingly impossible).

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Someone with more knowledge of Fidelity's offerings than me could help you more than I but I know this. With a 20 year time horizon working for you, history says stocks are the best way to go. In the Fidelity family, Contra Fund and Low Priced Stock have historically been good. Whatever you choose stay with the lower fees. Personally I always did much better with individual stocks than mutual funds because the fees of mutual funds were simply too high. But to buy individual stocks yourself you must do work and not react like the herd when the powerful emotions of fear and greed rear their ugly heads. You also may want to dollar cost average into the market. Realistically it won't matter much over a 20 year period but if we get a 20% correction right after you go "all in" it will make you feel bad for awhile.

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I find that hard to believe (bolded part). If it is true, and you are a great stock picker, you should have been been a hedge fund manager or Wall Street guy and you would be worth a billion. Fees of mutual funds didn't cause you a problem unless you constantly bought and sold funds with a load.

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Spice, I am very wealthy and hired a young man from Ross Perot, who previously managed Perot's family trusts, to manage my wealth as well as my children's trusts. This gives me more time to run my oil and gas business. I just try to give my financial advice to young Aggies when asked. Very few in my position do this due to the high number of low quality, low information, low experience and poorly manored posters encountered on this website.

We're the individual stocks you referenced picked by you, or the professional fund manager you hired? Just curious.

I do agree if you are picking active funds with high (1.5-2%) fees and a load on the front or back end, it's hard to make that really work for you. Especially if you could just buy some different indexes and self diversify that way in low cost funds. The overall risk of investing in just a handful of companies seems extraordinarily high for most people with only modest wealth to invest (which limits how many companies you can buy).


PS- when you buy that new 911 turbo I recommended (which has the same ground clearance as a Camry) can I have a ride?

OP, I have a similar amount in Fidelity Rollover IRAs and recently started using the Fidelity's professional management services. I have only been in it about a month or so, but I am pleased so far. The expenses are around 0.85% per year. I wanted to try a professionally managed option for a portion of my portfolio. You have to have $200k in an account to be eligible.

They buy different mutual funds based on their research and they have different programs based on your age and risk tolerance. You have to go to a Fidelity office and visit with a CFP to get it set up.

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We're the individual stocks you referenced picked by you, or the professional fund manager you hired? Just curious.

I do agree if you are picking active funds with high (1.5-2%) fees and a load on the front or back end, it's hard to make that really work for you. Especially if you could just buy some different indexes and self diversify that way in low cost funds. The overall risk of investing in just a handful of companies seems extraordinarily high for most people with only modest wealth to invest (which limits how many companies you can buy).


PS- when you buy that new 911 turbo I recommended (which has the same ground clearance as a Camry) can I have a ride?

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Initially they were picked by me. I primarily invested in blue chip dividend payers with a history of increasing dividends and share buybacks. I also bought companies that were leaders in their industry, had durable brands and strong customer loyalty. I bought when others panicked (on sale) and my real key was never selling a great company (even when overvalued) and realizing any taxable gains. My philosophy was that if I was ever lucky enough to buy a great company then I would never be stupid enough to sell it. I switched to the pros when I found a couple that owned the exact same stocks I did. Meaning we had the same philosophy. That freed me up to concentrate on my oil and gas business. So I ended up with the best of both worlds.

I really appreciate your recommendation of the 911 and I have driven them. It's a great pick because you are so right about the generous ground clearance. But Mrs pfo owned one in a former life and she hated it. She complained of the rough ride but the whole truth I think is the 911 didn't have enough storage room for all her purchases! Ha! Mrs pfo is quite the shopper!!! She even manages to get two shopping carts full of crap in the vette!!!

And Aggie BQ 03 you can have a ride in any of my stuff anytime! We attend all the home and away football games (except Jerryworld) and we would love to meet you!

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Someone with more knowledge of Fidelity's offerings than me could help you more than I but I know this. With a 20 year time horizon working for you, history says stocks are the best way to go. In the Fidelity family, Contra Fund and Low Priced Stock have historically been good. Whatever you choose stay with the lower fees. Personally I always did much better with individual stocks than mutual funds because the fees of mutual funds were simply too high. But to buy individual stocks yourself you must do work and not react like the herd when the powerful emotions of fear and greed rear their ugly heads. You also may want to dollar cost average into the market. Realistically it won't matter much over a 20 year period but if we get a 20% correction right after you go "all in" it will make you feel bad for awhile.

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I find that hard to believe (bolded part). If it is true, and you are a great stock picker, you should have been been a hedge fund manager or Wall Street guy and you would be worth a billion. Fees of mutual funds didn't cause you a problem unless you constantly bought and sold funds with a load.

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Spice, I am very wealthy and hired a young man from Ross Perot, who previously managed Perot's family trusts, to manage my wealth as well as my children's trusts. This gives me more time to run my oil and gas business. I just try to give my financial advice to young Aggies when asked. Very few in my position do this due to the high number of low quality, low information, low experience and poorly manored posters encountered on this website.

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I'm glad you are successful. Picking stocks and outperforming the market is extremely difficult over the long term. Very few actually do this, including the vast majority of professionals.

I agree Spice. Had the OP's account been with Vanguard I would have recommended an allocation to their total stock market fund and their S&P Index fund due to the very fact you just stated and their very low fee structure. I just wasn't as familiar with Fidelity as I am Vanguard but low fee Index funds are great for a portion of most average investors retirement accounts.

Fidelity's index funds are essentially the same as Vanguard's. Same performance, same cost structure. Vanguard's success with index funds and the media attention to them drove Fidelity to offer a similar lineup.

FUSVX has fractionally higher 1, 3 and 5 year annual returns compared to VFINX.

I would not change brokerages to choose one or another. If already in Fidelity - choose Fidelity and vice versa.

Thank you and everyone else for the input.

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Spice, I am very wealthy and hired a young man from Ross Perot, who previously managed Perot's family trusts, to manage my wealth as well as my children's trusts.

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I like you style, PFO.

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OP, I have a similar amount in Fidelity Rollover IRAs and recently started using the Fidelity's professional management services. I have only been in it about a month or so, but I am pleased so far. The expenses are around 0.85% per year. I wanted to try a professionally managed option for a portion of my portfolio. You have to have $200k in an account to be eligible.

They buy different mutual funds based on their research and they have different programs based on your age and risk tolerance. You have to go to a Fidelity office and visit with a CFP to get it set up.

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That 0.85% is in addition to fund expenses I guess?