Fidelity Investing: Navigating The Complexities Of Your Finances

Investing with Fidelity doesn't have to be complicated. Fidelity is one of the most well-rounded brokerages available, offering $0 trading commissions, a selection of over 3,300 no-transaction-fee mutual funds, top-notch research tools, and a mobile platform.

Fidelity offers a range of investment options, including stocks, bonds, mutual funds, ETFs, options, forex, and cryptocurrencies. The company also allows traders to purchase fractional shares, giving investors the opportunity to diversify into higher-cost stocks by buying a slice of a share.

Fidelity also provides extensive educational resources and research options for both beginner retirement investors and active stock traders. The company's two trading platforms, Fidelity.com and Active Trader Pro, offer advanced screeners with research and strategy-testing tools based on 10 years of historical data.

While Fidelity offers a comprehensive range of investment options and tools, it does not offer futures trading, and its cryptocurrency offering is limited compared to other brokers.

Overall, Fidelity is a good choice for investors of all levels, providing low costs, a user-friendly app, educational content, advanced trading features, and excellent customer support.

Choosing an account type: brokerage, 401(k), or IRA

Brokerage Account

A brokerage account is a standard investment account that anyone over the age of 18 can open. It is a flexible option as there are no restrictions on how much money you can add to the account, and you can generally withdraw cash whenever you want. You also have access to a wide range of investment options. However, a brokerage account is a taxable account, meaning you will have to pay taxes on any realised investment profits every year.

K)

A 401(k) is an employer-sponsored retirement plan. It offers tax-advantaged investment growth potential with relatively high contribution limits. You can contribute to the account pre-tax, and you generally don't pay any taxes while your money is in the account. Instead, you pay income taxes when you make withdrawals. Many employers will also match your contributions, encouraging you to save more. However, there are rules and restrictions on how much you can contribute and when and how you can take money out.

Individual Retirement Account (IRA)

An IRA is a retirement account that you can open and invest in independently. Traditional IRAs come with similar tax benefits to 401(k)s, but there are a couple of differences. You can't contribute pre-tax, but you may get a tax deduction for the year your contribution is made. You also have more flexibility and control, for example, you can contribute whenever you like, and contributions for the previous calendar year can be made up to the tax filing deadline.

Investment options: stocks, bonds, mutual funds, ETFs, options, forex, and cryptocurrencies

Investing with Fidelity doesn't have to be overly complicated. The first step is to figure out what you're investing for. Many people start by investing for retirement. Once you have a goal in mind, you need to choose an account type, decide how much money to invest, and what to invest it in.

Stocks

Stocks are securities that provide returns based on performance. They give you ownership rights in a corporation. Each share of stock is a proportional stake in the corporation's assets and profits, and these may be paid out as dividends. Stocks are traded during regular market hours.

Bonds

Unlike stocks, bonds don't give you ownership rights. Instead, they represent a loan from the buyer to the issuer of the bond. Bonds are issued by governments and corporations when they want to raise money. By buying a bond, you're giving the issuer a loan, and they agree to pay you back the face value of the loan on a specific date and to pay you periodic interest payments. Bonds give you two potential benefits when you hold them as part of your portfolio: they give you a stream of income and they offset some of the volatility you might see from owning stocks.

Mutual Funds

Mutual funds are pooled investments into bonds, securities, and other instruments. They are run by professional money managers who decide which securities to buy and when to sell them. Mutual funds can be redeemed only at the end of a trading day.

ETFs

Exchange-traded funds (ETFs) are a type of index fund that tracks a basket of securities. ETFs can be traded like an individual stock on an exchange. ETFs offer low expense ratios and fewer broker commissions than buying the stocks individually. ETFs are traded in the markets during regular hours, just like stocks are.

Options

Options include call and put options. Call options give the holder the right to buy a security at a specified price, while put options give the holder the right to sell a security at a specified price.

Forex

Forex, or foreign exchange, involves trading one currency for another. It is typically done on a margin basis, which means that you only need to put up a small percentage of the total value of the position. Forex trading can be very risky, but it can also be very rewarding.

Cryptocurrencies

Cryptocurrencies such as Bitcoin are digital currencies not backed by real assets or tangible securities. They are traded between consenting parties with no broker and tracked on digital ledgers. Cryptocurrencies are touted to lower transaction fees when compared to traditional online payment methods, and they are operated by a decentralized authority.

Trading platforms: Fidelity.com, Active Trader Pro, and the mobile app

Fidelity offers three trading platforms: Fidelity.com, Active Trader Pro, and the mobile app.

Fidelity.com

Fidelity's online trading experience offers an entry point for advanced traders and beginners who want the big picture of their finances. Its intuitive and easy-to-use interface allows users to quickly explore Fidelity's offerings and compare investments without feeling pressured or confused.

Active Trader Pro

Active Trader Pro is a downloadable desktop platform with intuitive shortcuts, a pre-built market, technical and options filters, advanced options tools, and a multi-trade ticket that can store orders for later and place up to 50 orders at a time. It is automatically available to customers who trade 36 times or more in a rolling 12-month period. It can also be accessed by calling Active Trader Services.

Mobile App

Fidelity's mobile app works on Android, iOS, Amazon, and Google Assistant-enabled devices. The app includes real-time quotes, multi-leg options trading, a consolidated version of the company's research offerings, and a notebook to save ideas and articles from the mobile browser. The app is highly rated and includes a customizable newsfeed.

Research and educational tools: third-party reports, screeners, and analysis tools

Fidelity offers a range of research and educational tools to help investors make informed decisions. These include third-party reports, screeners, and analysis tools that provide valuable insights and information.

Third-Party Reports

Fidelity provides access to third-party analyst opinions and an extensive library of third-party stock research. These reports offer qualitative and quantitative research, special reports, and daily and weekly market commentary. This allows investors to analyze their choices and make confident investment decisions.

Screeners

Fidelity's custom screeners enable investors to generate ideas, research, and compare investment options. The stock screener, for example, allows users to explore publicly traded stocks using pre-selected or custom criteria, with over 140 customizable values. The mutual fund screener helps search, filter, and sort through thousands of funds available through Fidelity.

Analysis Tools

Fidelity also offers powerful technical analysis tools that identify chart patterns to help recognize trends in security prices. Additionally, the platform provides access to dynamic watch lists, allowing investors to easily monitor the performance of their stocks. The recently viewed stocks list keeps track of the most recent 50 securities evaluated or compared, helping investors track potential buys.

Fidelity's research tools are designed to assist self-directed investors in evaluating various securities. The criteria entered are at the user's discretion, and pre-selected strategies are provided for convenience only. These tools empower investors to make informed decisions by providing valuable data and insights.

Customer support: 24/7 phone, email, and chat support, plus in-person advice at over 200 branches

Fidelity offers comprehensive customer support to its clients. The company provides 24/7 phone, email, and chat support, as well as in-person advice at over 200 branches. This multi-channel approach ensures that customers can easily access assistance through their preferred method of communication.

Fidelity's phone support is available around the clock, providing customers with the convenience of reaching out for help at any time of the day or night. The company's email support offers a convenient way to send detailed inquiries and receive responses. Additionally, the live chat option enables customers to connect instantly with customer service representatives for quick assistance.

Fidelity also stands out for its extensive network of over 200 branches, which offer in-person advice and educational resources. This physical presence allows customers to meet face-to-face with financial advisors, providing a more personalised and interactive experience.

The company's commitment to customer support is further evident through its online Learning Center, which utilises machine learning to provide customised educational materials tailored to each customer's investing behaviour. This innovative feature ensures that clients receive relevant and valuable information specific to their needs.

Fidelity's customer service has received positive reviews for its accessibility and knowledgeability. With round-the-clock live support, specialised services, and an extensive branch network, Fidelity ensures that its clients can easily access the assistance they need.

Frequently asked questions