Fidelity Auto Invest: A Comprehensive Guide to Automated Investing

In today's fast-paced world, managing your finances can feel overwhelming, especially when it comes to investing. Traditional investing methods often require extensive research, time commitment, and a deep understanding of financial markets. Fortunately, Fidelity Auto Invest offers a convenient and accessible solution for individuals seeking a hands-off approach to growing their wealth.

What is Fidelity Auto Invest?

Fidelity Auto Invest is a robo-advisor platform offered by Fidelity Investments, one of the largest financial services firms in the world. It's designed to automate your investment process, taking the guesswork out of portfolio management. With Fidelity Auto Invest, you can:

• Create a personalized investment portfolio: Based on your financial goals, risk tolerance, and investment horizon, Fidelity Auto Invest will build a diversified portfolio of exchange-traded funds (ETFs) that aligns with your objectives.
• Set and forget: Once your portfolio is established, Fidelity Auto Invest will automatically rebalance it periodically to maintain your desired asset allocation and ensure your investments stay on track.
• Benefit from low fees: Fidelity Auto Invest charges minimal fees, making it an affordable option for investors of all levels.
• Access expert guidance: While the platform is automated, you can still access Fidelity's financial advisors and customer support for personalized guidance and support.

How Fidelity Auto Invest Works

The process of setting up and using Fidelity Auto Invest is straightforward:

1. Create an account: You'll need to create a Fidelity account or link your existing one to access Fidelity Auto Invest.
2. Answer a few questions: To understand your financial situation and investment goals, Fidelity Auto Invest will ask you a series of questions about your risk tolerance, investment horizon, and desired return.
3. Choose an investment strategy: Based on your answers, Fidelity Auto Invest will recommend a portfolio of ETFs that aligns with your investment goals. You can choose from various investment strategies, including:
• Target date funds: These funds automatically adjust their asset allocation over time to become more conservative as you approach your target retirement date.
• Custom portfolios: If you prefer more control, you can customize your portfolio by selecting specific ETFs or asset classes.
4. Fund your account: Once you've chosen your investment strategy, you can fund your Fidelity Auto Invest account with a lump sum or through regular contributions.
5. Monitor your progress: Fidelity Auto Invest provides regular updates on your portfolio performance and allows you to adjust your investment strategy as needed.

Fidelity Auto Invest Fees

Fidelity Auto Invest charges minimal fees, making it a cost-effective option for investors of all levels.

• Asset-based fee: Fidelity Auto Invest charges a 0.35% annual fee on the total value of your investment portfolio. This fee is deducted from your account quarterly.
• ETF fees: There are also additional fees associated with the ETFs in your portfolio, but these are typically very low.
• No account minimums: Fidelity Auto Invest does not require a minimum investment amount, making it accessible to individuals with limited capital.

Benefits of Fidelity Auto Invest

Fidelity Auto Invest offers several benefits for investors, including:

• Convenience: Automated investing allows you to manage your investments easily without the need for extensive research or time commitment.
• Diversification: Fidelity Auto Invest creates diversified portfolios that spread your investments across multiple asset classes, reducing your overall risk.
• Professional management: Fidelity's team of investment professionals manages your portfolio, ensuring your investments are aligned with your goals.
• Low costs: Fidelity Auto Invest charges minimal fees, making it an affordable option for investors of all levels.
• Accessibility: No minimum investment amount is required, making Fidelity Auto Invest accessible to individuals with limited capital.

Potential Drawbacks of Fidelity Auto Invest

While Fidelity Auto Invest offers many benefits, it's important to consider some potential drawbacks:

• Limited customization: Fidelity Auto Invest provides some options for customization, but you don't have complete control over your portfolio. If you prefer a more hands-on approach, you may need to consider traditional investment methods.
• Fees: While Fidelity Auto Invest's fees are relatively low, they can still add up over time. It's essential to compare fees with other robo-advisor platforms before making a decision.
• Performance: Past performance is not a guarantee of future results. While Fidelity Auto Invest aims to provide positive returns, there is always the risk of losing money in the market.

Fidelity Auto Invest vs. Other Robo-Advisors

Fidelity Auto Invest is one of many robo-advisor platforms available in the market. When choosing a robo-advisor, it's essential to compare different platforms based on factors such as fees, investment options, minimum investment requirements, and customer service.

Here's a comparison of Fidelity Auto Invest with some other popular robo-advisor platforms:

Is Fidelity Auto Invest Right for You?

Fidelity Auto Invest can be a suitable option for individuals who:

• Seek a hands-off approach to investing: If you don't have the time or expertise to manage your investments, Fidelity Auto Invest can automate the process for you.
• Desire a low-cost investment solution: Fidelity Auto Invest's minimal fees make it an affordable option for investors of all levels.
• Value convenience and accessibility: Fidelity Auto Invest requires no minimum investment amount and offers convenient access to your investments through its online platform.

However, Fidelity Auto Invest may not be the best option for individuals who:

• Prefer a more hands-on approach: If you want complete control over your investment portfolio, you may need to consider traditional investment methods.
• Have specific investment goals: Fidelity Auto Invest may not be suitable for individuals with complex investment goals or who require specialized investment strategies.
• Are unwilling to accept any risk: Even though Fidelity Auto Invest aims to reduce risk through diversification, there is always the possibility of losing money in the market.

Conclusion

Fidelity Auto Invest offers a convenient and affordable way to invest your money automatically. With its minimal fees, diversified portfolios, and access to expert guidance, it can be a suitable option for individuals seeking a hands-off approach to growing their wealth. However, it's essential to consider your individual needs and preferences before making a decision. Compare different robo-advisor platforms and consult with a financial advisor to determine if Fidelity Auto Invest is the right choice for you.