As the world of investing becomes more accessible, many individuals are seeking ways to make the process easier and more convenient. One of the most popular methods is through automatic investments, which allow investors to set up a system where a fixed amount of money is invested at regular intervals, without the need for manual intervention. But does Fidelity, one of the largest and most well-established online brokerage firms, offer this feature?
The Benefits of Automatic Investments
Before we dive into whether Fidelity allows automatic investments, let’s take a look at the benefits of this investment strategy.
Automatic investments offer a range of advantages, including:
- Disciplined Investing: By setting up a regular investment plan, you can ensure that you invest a fixed amount of money at regular intervals, without being swayed by market volatility or emotional decisions.
- Convenience: Automatic investments eliminate the need for manual transactions, saving you time and effort.
- Dollar-Cost Averaging: By investing a fixed amount of money at regular intervals, you can reduce the impact of market fluctuations and timing risks.
- Long-Term Growth: Automatic investments can help you take advantage of the power of compounding, leading to potential long-term growth.
Fidelity’s Automatic Investment Options
Now, let’s explore whether Fidelity offers automatic investment options and how they work.
The good news is that Fidelity does offer automatic investment options, which can be set up through their online platform or mobile app. Here are the ways you can automate your investments with Fidelity:
Fidelity Automatic Investments Through Account Funding
Fidelity allows you to set up automatic transfers from your bank account to your Fidelity investment account. You can choose to transfer a fixed amount of money at regular intervals, such as weekly, bi-weekly, or monthly. This feature is available for brokerage accounts, IRAs, and 529 college savings plans.
Fidelity Automatic Investments Through Systematic Investment Plans
Fidelity’s systematic investment plans allow you to invest a fixed amount of money into a specific mutual fund or exchange-traded fund (ETF) at regular intervals. This feature is available for a wide range of Fidelity mutual funds and ETFs.
Fidelity Automatic Investments Through Portfolio Rebalancing
Fidelity’s portfolio rebalancing feature allows you to set up automatic rebalancing of your investment portfolio, ensuring that your asset allocation remains aligned with your investment goals and risk tolerance.
How to Set Up Automatic Investments with Fidelity
Setting up automatic investments with Fidelity is a relatively straightforward process. Here’s a step-by-step guide:
Step 1: Log in to Your Fidelity Account
Log in to your Fidelity online account or mobile app using your username and password.
Step 2: Select the Account You Want to Fund
Choose the account you want to fund with automatic investments, such as a brokerage account, IRA, or 529 college savings plan.
Step 3: Set Up the Transfer Amount and Frequency
Specify the amount you want to transfer and the frequency of the transfers, such as weekly, bi-weekly, or monthly.
Step 4: Choose Your Investment Options
Select the investment options you want to automate, such as a mutual fund, ETF, or systematic investment plan.
Step 5: Confirm Your Settings
Review and confirm your automatic investment settings to ensure they align with your investment goals and risk tolerance.
Tips for Successful Automatic Investing with Fidelity
While automatic investing can be a powerful tool, it’s essential to keep the following tips in mind to ensure success:
Start Small and Be Consistent
Begin with a modest investment amount and frequency, and gradually increase it over time as your financial situation improves.
Monitor and Adjust Your Portfolio
Regularly review your portfolio to ensure it remains aligned with your investment goals and risk tolerance. Make adjustments as needed to stay on track.
Take Advantage of Dollar-Cost Averaging
Use automatic investments to take advantage of dollar-cost averaging, which can help reduce the impact of market volatility on your investments.
Stay Informed but Avoid Emotional Decisions
Stay informed about market developments, but avoid making emotional decisions based on short-term market fluctuations.
Conclusion
Fidelity’s automatic investment options provide a convenient and disciplined way to invest in the markets. By setting up a systematic investment plan, you can take advantage of the benefits of dollar-cost averaging, reduce timing risks, and potentially achieve long-term growth. Remember to start small, be consistent, and monitor your portfolio regularly to ensure success.
Whether you’re a seasoned investor or just starting out, Fidelity’s automatic investment options can help you achieve your financial goals. So why not get started today and take the first step towards a more disciplined and convenient investment strategy?
Can I set up automatic investments with Fidelity?
Yes, Fidelity does allow automatic investments. In fact, it’s one of the most convenient ways to invest regularly, without having to constantly monitor and make manual investments. With automatic investments, you can set up a schedule to transfer funds from your bank account to your investment account at regular intervals, ensuring that you invest consistently and take advantage of dollar-cost averaging.
To set up automatic investments with Fidelity, you can log in to your online account, navigate to the ‘Transfer’ section, and select the ‘Set up automatic transfers’ option. From there, you can specify the amount you want to invest, the frequency of your investments, and the date of your first transfer. You can also choose to set up automatic investments through Fidelity’s mobile app or by contacting their customer service.
How often can I make automatic investments with Fidelity?
With Fidelity, you have the flexibility to set up automatic investments at various frequencies, including weekly, bi-weekly, monthly, quarterly, semi-annually, or annually. This means you can choose a schedule that aligns with your pay cycle or personal financial goals. For instance, if you receive your paycheck bi-weekly, you can set up automatic investments to coincide with your paydays.
It’s worth noting that the frequency of your automatic investments will impact the total amount you invest over time. More frequent investments can help you take advantage of dollar-cost averaging, while less frequent investments may be more suitable for those who want to invest larger sums less often. Ultimately, the key is to find a schedule that works for you and helps you achieve your long-term financial objectives.
What are the benefits of automatic investments with Fidelity?
Automatic investments with Fidelity offer several benefits, including convenience, discipline, and cost savings. By setting up a regular investment schedule, you can ensure that you invest consistently, without having to constantly monitor the markets or worry about timing your investments. This approach can help you avoid emotional decisions based on market volatility and stay focused on your long-term goals.
Moreover, automatic investments can help you take advantage of dollar-cost averaging, which involves investing a fixed amount of money at regular intervals, regardless of the market’s performance. This strategy can help reduce the overall cost of investing, as you’ll be buying more shares when prices are low and fewer shares when prices are high. Additionally, Fidelity offers a range of low-cost index funds and ETFs, which can further reduce your investment expenses.
Are there any fees associated with automatic investments at Fidelity?
Fidelity does not charge any fees for setting up automatic investments. In fact, the company is known for its low costs and competitive pricing. Most Fidelity index funds and ETFs have low expense ratios, which means you can invest in a diversified portfolio at a lower cost. Additionally, Fidelity offers a range of commission-free ETFs and mutual funds, which can help you save even more on transaction fees.
That being said, some mutual funds or investment products may have underlying fees or charges, such as management fees or administrative fees. However, these fees are typically disclosed upfront and are factored into the overall expense ratio of the fund. By choosing low-cost index funds or ETFs, you can minimize your investment expenses and keep more of your returns.
Can I stop or change my automatic investments at any time?
Yes, you can stop or change your automatic investments at any time. With Fidelity, you have the flexibility to adjust your investment schedule or cancel your automatic investments altogether. To make changes, simply log in to your online account, navigate to the ‘Transfer’ section, and select the ‘Manage automatic transfers’ option. From there, you can modify the amount, frequency, or date of your automatic investments.
If you need to stop your automatic investments, you can do so by clicking the ‘Cancel’ button next to the relevant transfer schedule. Alternatively, you can contact Fidelity’s customer service team for assistance. Keep in mind that if you cancel your automatic investments, you’ll need to manually invest in your account to continue growing your portfolio.
Are automatic investments with Fidelity secure?
Yes, automatic investments with Fidelity are secure. The company employs robust security measures to protect your personal and financial information. When you set up automatic investments, Fidelity uses encryption and secure servers to safeguard your data and prevent unauthorized access.
Additionally, Fidelity is a member of the Securities Investor Protection Corporation (SIPC), which provides limited insurance coverage for customer accounts in the event of a brokerage firm’s failure. The company also has a strong track record of protecting customer assets and adhering to industry regulations and standards.
Can I set up automatic investments for a specific Fidelity fund or account?
Yes, you can set up automatic investments for a specific Fidelity fund or account. In fact, the company offers a range of investment products and accounts that can be used for automatic investments. For instance, you can set up automatic investments for a taxable brokerage account, an IRA, or a 529 college savings plan.
To specify a particular fund or account, simply log in to your online account, navigate to the ‘Transfer’ section, and select the ‘Set up automatic transfers’ option. From there, you can choose the fund or account you want to invest in, as well as the amount and frequency of your investments. Fidelity also offers a range of target date funds and asset allocation models that can help you simplify your investment process and automatically diversify your portfolio.