THIS 3 Fidelity Index Fund Portfolio is ALL You Need | Summary and Q&A

TL;DR

Learn how to build a stress-free investment plan using just three Fidelity index funds that have outperformed professional money managers and protect against common investing mistakes.

Key Insights

• 🤑 A simple three-fund Fidelity portfolio can offer better returns than most professional money managers over the long term.
• 🥶 Fidelity index funds provide a stress-free and easy-to-manage investment strategy.
• 🫰 Investors can combine individual stocks with an index fund portfolio to satisfy their interest in stock picking without jeopardizing their long-term goals.
• 🥳 Expense ratios of Fidelity funds may be higher due to their active management approach, but the returns should justify the additional cost.
• 🏛️ The three-fund portfolio provides exposure to three main asset classes (stocks, bonds, and real estate) for broad market diversification and risk management.
• 🙂 Fidelity's approach to managing their own funds can result in slightly higher expenses compared to passive index fund providers like Vanguard and Schwab.
• 🙂 The Fidelity Real Estate ETF offers low fees compared to other Fidelity funds and has performed slightly better than its Vanguard counterpart.

Transcript

hey bowtie nation joseph hogue here with what could be the easiest investing video you ever see easy because i'm going to show you how to get your entire investment plan in just three fidelity index funds everything you need to invest in a stress-free and simple plan of just three fidelity funds do not confuse easy with not as good though in fact t... Read More

Questions & Answers

Q: How has the simple three-fund Fidelity portfolio performed compared to professional fund managers?

Over the last 10 years, the three-fund Fidelity portfolio has outperformed more than 80 percent of professional money managers, with a 13% annualized return.

Q: Why should investors consider using Fidelity index funds for this strategy?

Fidelity index funds offer a simple and stress-free investment plan, and they have the potential to beat actively managed funds while providing diversification and protection against investing mistakes.

Q: Is it possible to use a different index fund provider for this strategy?

Yes, the strategy can be implemented using any index fund provider. The video also mentions using Vanguard funds as an alternative to Fidelity.

Q: Why does the expense ratio of Fidelity funds appear higher compared to other providers?

Fidelity's expense ratios may seem higher due to their active management approach, which requires higher costs. However, it's essential to compare the funds' returns to determine if the higher expenses are justified.

Q: Can individual stocks be combined with the three-fund Fidelity portfolio?

Yes, Joseph Hogue suggests allocating a small portion (15% to 20%) of the portfolio to individual stocks for investors who enjoy stock picking. This allows them to satisfy their interest while minimizing the risk of derailing their long-term investment goals.

Q: What are the benefits of investing in a three-fund portfolio?

A three-fund portfolio provides broad market exposure across different asset classes (stocks, bonds, and real estate), ensuring a balanced and diversified investment strategy suitable for most investors.

Q: How can the Fidelity Real Estate ETF compare to its Vanguard counterpart?

The Fidelity Real Estate ETF has a lower expense ratio compared to most Fidelity funds and has performed slightly better than the Vanguard Real Estate ETF over the last five years. However, the fee difference is marginal, and both funds offer attractive returns.

Q: Can investors customize the three-fund portfolio based on their goals?

Yes, the portfolio is customizable to meet an individual's investment goals and risk tolerance. Investors can adjust the allocation percentages among the three funds and potentially include other index funds that align with their objectives.

Summary & Key Takeaways

• Joseph Hogue explains the benefits of building a simple three-fund portfolio using Fidelity index funds.

• The first fund is the Fidelity Blue Chip Value ETF, which invests in established, well-known companies with cheaper valuations.

• The second fund is the Fidelity MSCI Real Estate Index ETF, offering exposure to the real estate sector and maintaining a diversified portfolio.

• The third fund is the Fidelity Total Bond ETF, providing a mix of safe US government bonds and corporate/mortgage bonds.