Fidelity Auto Investing: A Comprehensive Guide

What is Fidelity Auto Investing?

Fidelity Auto Investing, formerly known as Fidelity Go, is a robo-advisor service offered by Fidelity Investments. This service allows you to automate your investment process by creating a diversified portfolio of exchange-traded funds (ETFs) based on your investment goals, risk tolerance, and time horizon.

Key Features of Fidelity Auto Investing

• Low Minimum Investment: Fidelity Auto Investing requires a minimum investment of only $0. You can start investing with any amount.
• Low Fees: Fidelity Auto Investing charges an annual advisory fee of 0.35% on your managed assets. This is a competitive fee structure compared to other robo-advisors.
• Diversified Portfolios: Your investment portfolio will be diversified across various asset classes, including stocks, bonds, and real estate.
• Personalized Investment Strategy: Fidelity Auto Investing uses a proprietary algorithm to create a personalized investment strategy tailored to your individual needs and goals.
• No Trading Fees: There are no trading fees associated with Fidelity Auto Investing.
• Tax-Loss Harvesting: Fidelity Auto Investing utilizes tax-loss harvesting strategies to potentially reduce your tax liability.
• Access to Fidelity Resources: As a Fidelity Auto Investing customer, you have access to a wide range of resources, including financial advisors, educational materials, and research tools.

How Fidelity Auto Investing Works

Getting started with Fidelity Auto Investing is simple:

1. Create an Account: You can create an account online or through the Fidelity mobile app.
2. Answer a Questionnaire: Fidelity will ask you questions about your investment goals, risk tolerance, and time horizon.
3. Fund Your Account: You can fund your account with a bank transfer, debit card, or check.
4. Choose an Investment Strategy: Fidelity will recommend an investment strategy based on your answers to the questionnaire.
5. Monitor Your Portfolio: You can monitor your portfolio performance and make adjustments as needed through your Fidelity account.

Who is Fidelity Auto Investing For?

Fidelity Auto Investing is a suitable option for a variety of investors, including:

• Beginners: If you are new to investing and want a simple and automated way to get started, Fidelity Auto Investing can be a good choice.
• Busy Professionals: If you don't have the time or expertise to manage your investments, Fidelity Auto Investing can take the hassle out of investing.
• Individuals with Limited Investment Capital: With no minimum investment requirement, Fidelity Auto Investing is accessible to investors with even small amounts of capital.
• Investors Seeking Low Fees: Fidelity's low advisory fees can make this service attractive for budget-conscious investors.

Pros and Cons of Fidelity Auto Investing

Pros

• Low minimum investment requirement
• Competitive fee structure
• Diversified portfolios
• Personalized investment strategies
• No trading fees
• Tax-loss harvesting strategies
• Access to Fidelity resources

Cons

• Limited investment options compared to traditional brokerage accounts
• Lack of hands-on control over portfolio management
• May not be suitable for investors with specific investment preferences or complex financial situations

Alternatives to Fidelity Auto Investing

If you're considering Fidelity Auto Investing, here are some alternative robo-advisors worth considering:

• Betterment: Betterment offers a similar robo-advisor service with a focus on socially responsible investing.
• Schwab Intelligent Portfolios: Schwab Intelligent Portfolios is another popular robo-advisor offered by a well-established financial institution.
• Vanguard Digital Advisor: Vanguard Digital Advisor is a robo-advisor service from Vanguard, known for its low-cost index funds.
• Acorns: Acorns is a robo-advisor that uses micro-investing to help you build your portfolio.

Conclusion

Fidelity Auto Investing offers a simple and affordable way to automate your investments and build a diversified portfolio. It's a good choice for beginners, busy professionals, and investors with limited capital. However, if you have specific investment preferences or a complex financial situation, you may want to consider other options.