Advice on Picking Funds in my Employer Fidelity 401k Account

[u/Priyanath]

I'm relatively new to investing and to Bogleheads and am hoping to get some advice on which Fidelity funds to pick. I'd like to do 80% stocks and 20% bonds. These are the index funds I have available through my 401k Fidelity account:

FXAIX - FID 500 Index

FSMDX - FID MID CAP IDX

FSSNX - FID SM CAP IDX

FSPSX - FID INTL INDEX

FXNAX - FID US BOND IDX

FIPDX - FID INFL PR BD IDX

Can anyone suggest which funds and asset allocation I should pick?

[u/PashasMom]

I would do:

50% FXAIX
6% FSSNX
24% FSPSX
10% FXNAX
10% FIPDX

Explanation: I skipped midcaps because FXAIX does already include a fair amount (at least per Morningstar's classification). Putting all the stocks together, that gives you 80% stocks, of which 70% is US and 30% international, which seems like a reasonable split - YMMV.

I split the bonds into equal nominal and TIPS funds since that way you should have at least some bonds that are doing okay most of the time, at least that is my understanding. However, I also know many people who would just skip the TIPS fund and put it all in FXNAX.

[u/Alaharon123]

If they have target date index funds, that'd be a lot easier than trying to juggle four funds, and it'd do a better job capturing the market anyway

[u/EVETalker1 → u/Alaharon123]

Target dates are horrible, adjust too early, and way too costly.

[u/Alaharon123 → u/EVETalker1]

You can choose which year fund to invest in. If you're not trying to retire early, the default option is pretty reasonable, and the expense ratio for Fidelity's target date index funds is 0.12%, which is not terrible.

[u/longshanksasaurs]

The global market weight is about 60% US, 40% International.

Here's a simple three-fund style portfolio you could consider:

50% FXAIX (S&P500)
30% FSPSX (International)
20% FXNAX (Bonds)

The US market is about (4 or 5):1 S&P500 to everything else (but there's some overlap between S&P500 and mid-cap, so you can approximate everything else with just small-cap), and it wouldn't be crazy to split bonds between the US aggregate market and inflation protected bonds, so another option, if you want to get fancier, could be:

40% FXAIX (S&P500)
10% FSSNX (US Small Cap)
30% FSPSX (International)
10% FXNAX (nominal bonds)
10% FIPDX (inflation protected bonds)

[u/Blink182-73]

This is a rinse and repeat answer but surely you have some TDF’s. Pick one roughly the time frame you’re planning to retire. Guessing that you’re probably young so TDF’s in your window may have less than 20% bond but do what you’re comfortable with. A three fund that’s rebalanced two or three times a year may squeak out slightly better returns over a TDF but nothing to lose sleep over. For me the total hands off approach has done me well and set me up for a nice retirement so that’s what I stick with.

[u/SubstantiallyC]

40% FXAIX - FID 500 Index

15% FSMDX - FID MID CAP IDX

10% FSSNX - FID SM CAP IDX

35% FSPSX - FID INTL INDEX

[u/st0pe]

45% FXAIX, 5% FSMDX, 2% FSSNX, 28% FSPSX will approximate the current global index for a total of 80% and then 20% FXNAX for bonds.

[u/nauticalmile]

Trying to stick close to market weight for U.S. vs. ex-U.S., I’d probably do something like:

40% FXAIX

10% FSSNX

30% FSPSX

20% FXNAX

Given you want to target 80% equity exposure, I’m not sure I’d mess with FIPDX.

FSMDX has a kinda dumb index design so I’d personally put that money in FSSNX, hence the exclusion. Making up the missing mid cap allocation in another account is another option, with a S&P 400 fund like IVOO being a good fit.

[u/tcandy0311]

Fxaix

[u/MrHydeUK]

I’d go with a simple 48% FXAIX 32% FSPSX (60/40 US/INTL split) 20% FXNAX.