Fidelity Investing Options: How To Change Your Strategy

There are a variety of ways to change your investing options on Fidelity, depending on the type of account you have. For example, if you have a 529 college savings plan, you can change your future investment allocations or your current asset allocations. If you have a 401k, you can modify your investments by adjusting your financial portfolio, reallocating asset allocation, and diversifying your investments to align with your financial goals. You can also change how you receive your dividends and capital gains distributions. Additionally, Fidelity offers a range of investment options, such as mutual funds, exchange-traded funds (ETFs), stocks, bonds, cryptocurrencies, and precious metals.

How to change dividends and capital gains distributions

To change how your dividend and capital gains distributions are invested, follow these steps:

• Log in to your Fidelity account.
• Navigate to the Dividends and Capital GainsLog In Required page, where you will be able to view your account information.
• Find the security or mutual fund you want to change. Under "Action", select "Update" to access the Update Distributions page.
• To update a security: On the Update Distributions page, you will see dividends and capital gains combined in a single row. You cannot change them separately, so make your selection accordingly.
• Choose whether you want to apply the change to all current equity positions in this account and/or all future equity purchases, transfers, and deposits.
• Click "Update" and review the confirmation page that specifies the changes made, along with a link to change distributions in another account.
• To update a mutual fund: On the Update Distributions page, you will see dividends and capital gains listed separately, allowing you to choose a different distribution option for each.
• Note: You may come across the "Directed (Deposit into your Fidelity Mutual Fund account)" column. This option allows you to direct dividends and capital gains into one of your Fidelity mutual funds, but it is not available for future purchases, transfers, or deposits.
• Similar to updating a security, make your selection and determine whether you want to apply the change to all current mutual funds in the account and/or future mutual fund purchases, transfers, and deposits.
• Click "Update" and review the confirmation page, which will outline the changes made and provide a link to change distributions for another account.

These changes will be effective immediately and will be reflected on your Dividends and Capital Gains summary page. If you have signed up for email notifications, you will receive a confirmation within 1-2 business days. If you have not opted for eDelivery, a confirmation will be sent to your U.S. Mail within 3-5 business days.

How to change your 529 plan's investment instructions

You may occasionally need to adjust how you're investing your 529 college savings plan assets. You can change your future investment allocations or your current asset allocations. You can make these changes online, and the steps are easy to follow.

An asset allocation is how and where the money you contribute to your plan in the future is allocated and invested (future asset allocations), and how and where your plan's existing assets are allocated and invested (current asset allocations). As you get closer to paying for college, or if your plan's beneficiary changes, you may want to change your future asset allocations and/or your current asset allocations.

On the 529 Plan Investment Instructions page, you will need to select the account and have the beneficiary's name, Social Security number, and date of birth available.

You can change how your future investments are allocated as often as you like. For example, let's say your plan's assets are now invested in the moderate growth portfolio, but you want your future contributions to go into an age-based portfolio.

You can change your current asset allocations twice per calendar year (or upon a change of your beneficiary). For example, perhaps you want to exchange your current assets invested in the static portfolio to an age-based portfolio.

You may find it helpful to review asset allocation choices on the 529 Plan Investment Options page.

Your changes for future investment allocations will be in effect the next time you contribute to your 529 college savings plan account.

Your current asset allocation change:

• If requested before 4 p.m. ET, it will receive that day's closing price
• If requested after 4 p.m. ET, it will receive the next business day's closing price
• Applies to your entire portfolio; you can't choose to exchange only part of your portfolio

If you've chosen eDelivery, you'll receive an email confirmation in 1–2 business days. If you haven't chosen eDelivery, you'll receive a statement in the mail in 3–5 business days.

How to change investments in a Fidelity 401k

Changing your investments in a Fidelity 401(k) can be done entirely online and is a great way to ensure your retirement savings are in line with your financial goals. It's important to make investment decisions based on both your short-term financial situation and your longer-term investment horizon.

Step 1: Log in to Your Fidelity Account

Go to the Fidelity website or app and log in to your account. This will give you access to your retirement account management tools. Ensure the security of your login details to safeguard your financial information.

Step 2: Navigate to the 401(k) Contribution Settings

Once you're in your account, go to the 'Planning & Advice' section. Here, you'll find tools and resources to help you assess your retirement goals, simulate different scenarios, and fine-tune your investment strategies.

Step 3: Review Your Current Investments

Before making any changes, it's important to review your current investments. Assess your investment mix and evaluate the investment returns within your Fidelity 401(k). Analyze the performance of each fund in your portfolio, considering historical returns, expense ratios, and investment style. Compare your investments' performance to relevant benchmarks, and understand the fees associated with them.

Step 4: Determine Your Investment Goals

Clearly define your investment goals and align them with your financial objectives and contribution allocation. This will set the foundation for your investment strategy and long-term financial success.

Step 5: Research and Choose New Investments

When choosing new investments, consider your risk tolerance and market conditions. Evaluate how much risk you are comfortable with, and select investment options that fall within that range. Stay informed about economic indicators and trends to make informed decisions and optimize your Fidelity 401(k) portfolio.

Step 6: Consider the Fees and Expenses

Before making changes, understand the fee structures and expenses associated with different investment choices within your Fidelity 401(k). Use tools like fee calculators and expense ratios to evaluate their impact on your portfolio's overall performance. Even small differences in costs can accumulate significantly over time, impacting your retirement savings.

Step 7: Make the Changes

Execute the changes by realigning your investment portfolio. Go to your account management dashboard and locate the option to make changes to your investments. Follow the prompts to realign your portfolio, ensuring you select funds or securities that align with your updated strategy.

Additional Considerations:

• Frequency of Changes: Determine how often to change investments based on factors such as investment frequency, the need for portfolio rebalancing, and adherence to investment guidelines that align with your financial goals.
• Restrictions and Limitations: Be aware of any investment regulations, rules, or recommendations that may impose restrictions on your investment choices. 401(k) plans often have regulations in place to limit high-risk assets and dictate when and how often investments can be changed.
• Potential Risks: Changing investments carries certain risks, including fluctuations in investment performance and adjustments to risk tolerance. Carefully evaluate the investment options within your 401(k) plan, considering factors such as diversification, fees, and historical performance.

How to trade options

Trading options can be a complex and risky process, so it's important to understand the basics before getting started. Here's a detailed guide on how to trade options with Fidelity:

Learning the Basics

First, it's important to understand what options are and how they work. Options are contracts that allow you to buy or sell an underlying asset, such as stocks or ETFs. When you buy options, you use money at the outset of the trade, while selling options generates money upfront. There are also more complex strategies that involve buying and selling options simultaneously. Understanding these foundational aspects is crucial for building a strong options trading plan.

Getting Approved

Before you can start trading options, you need to get approved. At Fidelity, this involves completing an options application that assesses your financial situation and investing experience. You'll also need to read and sign an options agreement. Make sure you understand the risks involved, as options trading may not be suitable for all investors.

Understanding the Language

Familiarize yourself with the language and unique characteristics of options. Know the difference between calls and puts. A call option gives you the right to buy an underlying asset before the contract expires, while a put option gives you the right to sell. Understand that each options contract typically controls 100 shares.

Building a Plan

Consider building a trading plan that suits your needs. Decide how much risk you're comfortable with, which could be a specific dollar amount or a percentage of your investible funds. Remember to evaluate how options trading might impact your overall portfolio and choose the appropriate account for your strategy, as certain accounts may restrict certain options.

Identifying What to Trade

Develop an outlook on a specific investment. Decide on the direction you think an investment will go and the timeframe within which it will move in that direction. Utilize resources like market commentary, investing ideas, and screeners to generate ideas and make informed decisions.

Picking a Strategy

Explore different options strategies based on your outlook. Important factors to consider include picking the expiration date and strike price. The strike price is the price at which the underlying asset will be bought or sold upon the exercise of the option. You can use the options chain to find specific options to trade, where you can see all the calls and puts available for a stock, along with their expiration dates and strike prices.

Understanding Volatility and Probability

It's important to understand how volatility and probability influence options. Changes in volatility can significantly impact your trade, so it's helpful to set up and manage your trade with these factors in mind. Use tools like the Options Trade Builder and Profit/Loss Calculator to visualize the risk and reward of a trade based on time, volatility, and changes in the underlying asset's price.

Having an Exit Plan

Make sure you have an exit strategy in place. Since options contracts expire, you'll need to monitor your position and make decisions along the way. You may decide to hold, roll (close your current position and enter a new one), or close the trade.

Placing Your Trade

Once you've completed the previous steps, you're ready to place your options trade. Remember that there are many different options strategies and nuances that you'll discover with experience. With time, you'll learn how to optimize your options trading strategy.

How to change investment options in an individual retirement account (IRA)

Changing your investment options in an individual retirement account (IRA) is a straightforward process with Fidelity. Here's a step-by-step guide on how to do it:

Step 1: Log in to Your Fidelity Account

Access your Fidelity account by logging in with your credentials. This will allow you to view and manage your investments.

Step 2: Review Your Current Investment Options

Before making any changes, it's essential to understand your current investment options and their performance. Take some time to review your portfolio and assess how your investments are allocated. You can use the tools available on the Fidelity website to analyze your current portfolio and its performance.

Step 3: Determine Your New Investment Choices

Fidelity offers a wide range of investment options for IRAs, including:

• Exchange-Traded Funds (ETFs): These are funds that can be bought and sold throughout the market day. They offer diversification, tax efficiency, and broad market exposure.
• Stocks: You can invest in stocks of publicly traded companies in both domestic and international markets.
• Mutual Funds: Fidelity offers a variety of mutual funds to choose from, allowing you to diversify your portfolio further.
• Precious Metals: You can buy gold, silver, platinum, and palladium to add another layer of diversification to your portfolio.
• Crypto: Fidelity Crypto is an option for investors with a high-risk tolerance. Crypto is highly volatile and not insured by the FDIC or the Securities Investor Protection Corporation.
• Bonds: Fixed-income options are available to provide diversification, income, and tax efficiencies.

Step 4: Make the Necessary Changes

Once you have decided on your new investment choices, it's time to make the changes to your IRA. You can do this by following the instructions provided by Fidelity for each type of investment. For example, if you want to invest in stocks, you can search for and select the stocks you want to add to your portfolio.

Step 5: Monitor and Adjust

After you've made your changes, it's important to regularly monitor your investments' performance. Depending on market conditions and your financial goals, you may need to make adjustments to your investment options over time. Fidelity offers various tools and resources to help you stay on top of your investments and make informed decisions.

Remember, investing involves risk, and the value of your investments may fluctuate. It's always a good idea to consult with a financial advisor or tax professional before making significant changes to your investment portfolio.

Frequently asked questions