Setting Up Automatic Mutual Fund Investments With Fidelity

Setting up automatic investments in mutual funds through Fidelity is a straightforward process that can help you grow your wealth over time. Fidelity's auto-investing feature, called Recurring Investments, allows you to set up and manage automatic investments and recurring transactions. This feature is available for various accounts, including brokerage accounts, retirement accounts (Roth IRA, 401k), and even your HSA. In this paragraph, we will provide an overview of the steps to set up automatic mutual fund investments with Fidelity, and in the following paragraphs, we will delve into each step in more detail.

Log in to your Fidelity account

To set up automatic investments in mutual funds using Fidelity, the first step is to log in to your Fidelity account. Here is a detailed, step-by-step guide on how to do this:

Logging in to Your Fidelity Account

• Go to the Fidelity website, www.fidelity.com, or use the Fidelity Mobile® app. The automatic investment feature is not currently available on the mobile app, so it is recommended that you use the website.
• Enter your login credentials.
• You will then be taken to your account homepage, where you will have access to a range of tools and features to help you manage your investments.
• It is important to ensure the security of your login details to protect your sensitive financial information. Fidelity offers multi-factor authentication and encryption protocols to safeguard your account, so be sure to take advantage of these security measures.
• Once logged in, you can navigate the platform to set up automatic investments, monitor your portfolio performance, and explore various investment opportunities.

The next steps to setting up automatic investments in mutual funds are selecting the investment account, choosing the automatic investment option, selecting the investment frequency and amount, choosing the specific investments, and reviewing and confirming the setup.

Select the investment account

After logging in to your Fidelity account, you will be able to see a list of your accounts. From there, you can select the account you wish to set up automatic investing for. You can choose from a variety of options, including:

• Transferring funds from an external bank account to your investment account, without investing that cash upon transfer.
• Transferring and then investing funds from an external bank account.
• Investing funds from a core position, i.e. auto-investing funds already sitting in your investment account.

If you select the second option, you will be taken to a page where you can configure your auto-investing schedule. You will be able to select the bank you wish to transfer money from, and then choose whether the money will be transferred into your brokerage core account or mutual funds.

If you select the third option, you will be choosing to auto-invest funds that are already in your investment account. This option is for those who already own mutual funds and want to invest in more.

It is important to note that you can currently only auto-invest into mutual funds that you already own. Therefore, if you don't own any mutual funds yet, you will need to make a minimum investment into at least one mutual fund before you can configure your automatic investments.

Investment Options

Once you have selected your investment account, you can then choose your investment options. Fidelity offers a range of investment options, including mutual funds, stocks, or ETFs. When choosing between these options, it is important to consider your investment goals and risk tolerance. Mutual funds offer diversification and are managed by professionals, while ETFs provide diversification and lower fees by being traded on exchanges like stocks. Individual stocks allow for direct investment in specific companies.

Investment Amount and Frequency

After selecting your investment type, you will need to specify the amount you want to allocate for automatic investing and the frequency of contributions. Fidelity offers the flexibility to set the amounts, frequency, and timing of your recurring investments, and you can change them whenever needed. The minimum amount you can auto-invest is $10, and you can choose from various frequencies, including daily, weekly, monthly, or quarterly.

Confirm and Save

Before finalizing, review and confirm your automatic investment plan to ensure it aligns with your investment decisions and financial goals. It is important to carefully analyze your investment options and consider your financial objectives and risk tolerance.

Choose the automatic investment option

Now that you have logged into your Fidelity account, it's time to choose the automatic investment option. This will enable recurring transfers at the frequency that matches your investment strategy.

Fidelity's automatic investment feature allows for easy setup of periodic contributions to your investment account, eliminating the need for manual intervention. You can choose to have these transfers occur at regular intervals such as weekly, bi-weekly, monthly, or quarterly. This helps establish a disciplined savings habit and ensures the consistent capitalization of chosen investment vehicles, promoting long-term wealth growth and financial stability.

To set up automatic investments, you will need to specify the investment frequency and amount. Consider setting up automatic transfers based on your unique financial situation and objectives. By determining a regular schedule and the appropriate investment amount, you can streamline your wealth-building process and stay disciplined in your investment strategy.

It's important to ensure that the transferred funds match your risk tolerance and investment timeline. Aligning your contributions with your long-term wealth management goals can help you achieve financial independence and grow your portfolio consistently over time.

Fidelity's automatic investment feature is compatible with your brokerage account, retirement account (Roth IRA, 401k), and even your HSA. You can also set up automated plans for regular stock/ETF purchases, enabling you to invest a fixed amount at regular intervals (weekly, bi-weekly, or monthly).

Select the investment frequency and amount

When setting up automatic investments with Fidelity, it is important to consider your financial goals and capabilities to determine the appropriate investment frequency and amount. This step ensures that your contributions align with your long-term wealth management strategy and risk tolerance.

Firstly, evaluate your income, financial objectives, and time horizon. If you opt for weekly or bi-weekly investments, you will need to ensure that you have sufficient funds in your bank account to cover these regular contributions. Monthly or quarterly investments may be more suitable if you prefer to invest larger amounts less frequently.

Fidelity offers flexibility in choosing the investment frequency, allowing you to align your contributions with your financial goals and cash flow. You can select from various options, including weekly, bi-weekly, monthly, or even daily or weekly schedules by setting up multiple frequencies.

The minimum amount you can auto-invest is $10, and you can always start small and increase your contributions over time. It is crucial to invest an amount that matches your risk tolerance and investment timeline to achieve financial independence and consistently grow your portfolio.

By determining the right investment frequency and amount, you can streamline your wealth-building process and maintain a disciplined approach to investing. This way, you can make informed decisions that contribute to long-term financial growth and stability.

Choose the investments to be made

The selection of specific investment options is crucial in creating a well-diversified portfolio. Diversification is a key strategy to spread risk across various asset classes, enhancing the potential for long-term growth and risk management. Diversification involves allocating your investments across different types of assets, such as stocks, bonds, and mutual funds, to reduce the impact of any single investment's performance.

Fidelity offers a wide range of investment choices, allowing you to tailor your portfolio according to your risk tolerance and investment objectives. You can choose from the diversification of mutual funds, the flexibility of ETFs, the potential growth of individual stocks, or the stability of bond funds.

When selecting your investments, it's important to consider your financial goals, risk tolerance, and time horizon. Assess how much fluctuation in investment returns you are comfortable with and whether your goals are short-term or long-term. A higher risk tolerance may lead to potentially higher returns but also increased volatility, while lower risk tolerance may offer more stability but could result in lower returns.

By balancing these factors and aligning your investments with your unique financial situation, you can create a customized strategy that maximizes your portfolio's potential and minimizes risks.

Additionally, consider incorporating strategies such as dollar-cost averaging, where you invest a fixed dollar amount at regular intervals, reducing the impact of market volatility. You can also take advantage of dividend reinvestment to enhance compounding growth over time.

Remember to regularly review and adjust your investment selections based on market conditions and your evolving financial goals to stay on track and optimize your portfolio's performance.

Frequently asked questions