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Originally Posted by Bobnfl
Who do you have to manage your money if you do. We have Fidelity and am wondering if it is worth it or is there a better way. Are local investment companies better? What is the normal charge at other companies? I know Fidelity charges over 1%, is that too much. They have started pushing annuities more & more. Which I try to stay away from. Please give me some insight into what other people do.
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Fidelity is a good company. They have a lot of mutual funds to choose from. I suggest an Equity Mutual Fund or an S&P 500 Mutual Fund. These funds invest in pretty much everything on the Dow or the S&P 500. Thus, reliably, when the market goes up, your holdings go up, and vice versa. This gets rid of a lot of the risk. Right now, with Biden in the White House (though it doesn’t really have anything to do with him), the stock market is the highest it has ever been. You don’t like inflation? Make it work for you. Make money off the companies that raise their prices and have stock prices. If gas goes up, make money off the profits. If pharmaceutical prices bother you, make money off them by owning a piece of them through a mutual fund.
If you look at a list of the various Fidelity funds, you will notice that some make more money than others and some lose more. This changes! Mutual Funds are safer than individual stocks, but even so, you have to be careful. For example, years ago I read that international stocks were going to go up a lot, so I moved a lot of my retirement funds to there. They did go up, but I don’t pay much attention to all this, so when I looked again, I discovered that they were actually going down now, and other funds were growing.
The nice thing about a good Equity Index Fund is that if one company or industry tanks, other companies may still be doing okay. In a sense an Equity Index Fund means investing in America and providing capital for industry. Another great thing about an Equity Index Fund is that the costs to you may be much lower because they just buy everything on the menu.
The tough thing is that with the market high, if you put in your money right now, if it goes down temporarily, you lose money. Buying low makes more sense, but how do you know when it’s low and not going lower. When Trump was elected, my mutual funds took and went up and up for several years. They nearly doubled! That’s why I could afford to move here. But then, while he was still president, Covid-19 hit, and the stock market tanked, and my funds dropped by several hundred thousand dollars. Ouch! His fault? No, but on his watch. I lost probably half of what I had gained. Buying in when the market is low is great, but it doesn’t work unless you have money to put into it at that moment.