When I opened my Roth IRA account in August 2006, I purchased a stake in Fidelity’s 2050 Freedom fund as my initial investment. The Fidelity 2050 fund is a target (aka lifecycle) fund that readjusts itself annually as you approach retirement. Lifecycle funds are solid long-term investments, but Fidelity’s freedom funds invest nearly 9% of the net assets in the bond market. Considering that I’m still in my early 20’s, a stock-heavy portfolio would boost my investment returns over the long run, courtesy of ol’ compound interest. Plus, I already own savings bonds, and plan to setup a US treasury bill ladder later this fall.
So I liquidated my stake in FFFHX, locking in 9.61% gain since my initial fund purchase. 9% isn’t too shabby, but I missed out on 15%+ gains by investing rather conservatively.
Please Share your Mutual Fund Ideas
Now, I’m turning to you for potential fund ideas. I am well aware that many of you invest in mutual funds, so please share any solid mutual funds you either currently own or have knowledge of. My goal is to amass a list of 5 potential mutual fund buy candidates by Friday. Over the weekend, I will cut down the list to 2-3 of which are the most likely picks. Then by Monday or Tuesday, hopefully the stock market will trade calmly so I may enter a fund position.
Own a solid mutual fund? If so, what is it and why did you invest?
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I figure why try to find a mutual fund that might beat the market (but might also suck) when you can just get the market return (minus a very small fee). Get an index fund. Or if you’re going to hold it for a very long time, stick it in an ETF since the cost of the trades will be even lower than the funds fees.
-Brian (I’m trying to get a little SEO from your top commentors plugin, hope you don’t mind)
The ETF trades will kill me with commission fees, though. Fidelity charges around $30 a trade I believe.
And smart move with the SEO anchor text. I’ll block your old link once you make the list.
“The ETF trades will kill me with commission fees, though. Fidelity charges around $30 a trade I believe.”
Why not just move it out of Fidelity? I mean except that it’s a PITA to move accounts
-Brian
Brian,
When I moved from Sharebuilder to Tradeking, it was such a hassle that I dare not make a move again.
Also, I often make tiny Roth IRA contributions of $25 and $50 at a time, so ETFs would cost me too much money in the long run.
Where did you open your Roth?
Unfortunately, I’m in the same boat. I need to move away from a bad set up I had in college, but the hassle is just causing me to stall, so I haven’t moved the Roth yet. I’d like to be able to keep a majority of my money in an index tracking vehicle and use the rest for buying individual stocks, so I’m thinking about going with a discount broker.
Yep, even at the cheapest discount broker, $25-50 stock buys aren’t going to work. My suggestion would be to get thy self into an index fund (the difference between ETFs and index fund expenses is low anyway). It looks like Fidelity’s S&P 500 index has a good (low) expense ratio:
http://www.fool.com/mutualfunds/indexfunds/table01.htm
I would look at vanguards real estate. It is down right now so it may be good to get in soon. The housing market will not always be down!!
I have the same fund. Didnt realize it didnt even outperform the index. I plan on reinvesting into the index fund fidelity has… or into another mutual fund i found that looks really good.