Fidelity Investments is a household name in the financial world, recognized for its comprehensive suite of investment products, robust trading platforms, and extensive research tools. It's often lauded as one of the most well-rounded brokerages, catering to a wide spectrum of investors, from absolute beginners to seasoned traders. But what exactly makes Fidelity tick, and how can you leverage its offerings to achieve your financial goals?
This lengthy guide will walk you through everything you need to know about Fidelity Investments, providing a step-by-step roadmap to understanding its services and getting started on your investment journey.
Discovering Fidelity Investments: Your Path to Financial Growth
So, you're curious about Fidelity Investments, are you? Excellent! You've taken the crucial first step: asking questions and seeking knowledge. Whether you're just dipping your toes into the investment waters or you're a seasoned pro looking for a new platform, understanding what Fidelity offers is key. Let's embark on this journey together to uncover how Fidelity can serve your financial needs.
Step 1: Understanding What Fidelity Investments Is (And Isn't)
Before diving into the "how-to," let's lay the groundwork.
What is Fidelity Investments?
Fidelity Investments is a diversified financial services company that provides a wide range of products and services, including:
Brokerage services: For buying and selling stocks, ETFs, mutual funds, options, and more.
Retirement accounts: Such as 401(k)s, IRAs (Traditional, Roth, Rollover), and small business plans.
Managed accounts: For those who prefer professional management.
Cash management solutions: Accounts that offer banking-like features.
Wealth management and financial planning: For personalized advice and comprehensive financial strategies.
Educational resources: A vast library of articles, webinars, and tools to help you learn about investing.
What Fidelity is NOT:
It's important to clarify that Fidelity is not a bank in the traditional sense, though it offers many banking-like features through its Cash Management Account. It's primarily an investment brokerage and wealth management firm. It also does not offer futures trading or spot forex, which might be a consideration for highly specialized traders.
Step 2: Exploring Fidelity's Key Offerings
Fidelity's strength lies in its breadth of offerings. Let's break down some of the most prominent ones.
Sub-heading 2.1: Investment Choices Galore
One of Fidelity's biggest draws is its extensive selection of investment products. You'll find:
Stocks: Access to U.S. and international equities, with $0 commission on online U.S. stock trades. You can even invest in fractional shares, making it accessible to start with smaller amounts.
ETFs (Exchange-Traded Funds): A vast array of commission-free ETFs, including Fidelity's own and those from leading industry providers. ETFs offer diversification similar to mutual funds but trade like stocks throughout the day.
Mutual Funds: Fidelity is renowned for its mutual fund offerings, including its popular Fidelity Zero index funds, which boast no expense ratios and no minimum investment requirements. They also offer thousands of no-transaction-fee mutual funds from other companies.
Options: Trade equity, ETF, and index options with $0 commission (though a $0.65 per contract fee applies).
Fixed Income: Bonds and CDs are available for those seeking more stable, income-generating investments.
Cryptocurrency: Fidelity offers limited direct trading in Bitcoin, Ethereum, and Litecoin, which is more than many competitors, but still limited compared to dedicated crypto exchanges.
Sub-heading 2.2: Account Types for Every Goal
Fidelity provides a diverse range of account types to suit different financial objectives:
Individual Brokerage Account: A standard taxable investment account for general investing.
Retirement Accounts (IRAs):
Traditional IRA: Contributions may be tax-deductible, and earnings grow tax-deferred until retirement.
Roth IRA: Contributions are made with after-tax money, but qualified withdrawals in retirement are tax-free.
Rollover IRA: For consolidating retirement savings from previous employers.
SEP IRA / SIMPLE IRA: For self-employed individuals and small business owners.
Custodial Accounts (UGMA/UTMA): For investing on behalf of a minor.
529 College Savings Plans: Tax-advantaged accounts designed for saving for education expenses.
Health Savings Accounts (HSAs): A tax-advantaged savings account used for healthcare expenses, often paired with high-deductible health plans.
Fidelity Cash Management Account: This account offers features similar to a checking account, including a debit card, bill pay, and ATM fee reimbursements, while allowing uninvested cash to earn interest.
Sub-heading 2.3: Powerful Trading Platforms and Tools
Fidelity offers several platforms to cater to different trading styles and experience levels:
Fidelity.com (Website): The main website provides award-winning research, in-depth analytics, and idea generation tools, all integrated with an easy-to-use trading interface. It's suitable for beginners and intermediate investors.
Fidelity Mobile App: A highly-rated mobile app for both iOS and Android that allows you to view, manage, and take action on your portfolio 24/7. It's great for on-the-go monitoring and basic trades.
Trading Dashboard: A single-screen command center on Fidelity.com for getting real-time market data, research, and executing trades. Recommended for intermediate to advanced users.
Active Trader Pro®: Fidelity's full-featured downloadable platform designed for advanced and active traders. It offers real-time insights, dynamic visual analytics, powerful charting tools, conditional orders, and customizable watchlists.
Sub-heading 2.4: Education and Research: A Wealth of Knowledge
Fidelity distinguishes itself with its robust educational resources and research tools. You'll find:
Independent research from 20+ providers: Giving you diverse perspectives on stocks, ETFs, and mutual funds.
Screeners: Highly customizable screeners for stocks, ETFs, mutual funds, and fixed income.
News and market insights: Stay updated with real-time news and analysis.
Learning Center: Articles, videos, webinars, and online courses covering everything from investing basics to advanced strategies.
Step 3: Getting Started with Fidelity: A Step-by-Step Guide
Ready to open an account? Here's how to do it.
Step 3.1: Define Your Investment Goals
Hold on a second! Before you even think about clicking "Open Account," take a moment to honestly assess your financial goals. Are you saving for retirement, a down payment on a house, your child's education, or just looking to grow your wealth over time?
Short-term goals (under 5 years): Often better suited for less volatile investments like high-yield savings accounts or short-term bonds.
Long-term goals (5+ years): Can typically tolerate more risk and benefit from growth-oriented investments like stocks and stock mutual funds/ETFs.
Knowing your goals will help you choose the right account type and investment strategy.
Step 3.2: Choose Your Account Type
Based on your goals from Step 3.1, decide which Fidelity account is best for you.
For general investing and flexibility, a Fidelity Brokerage Account is a great starting point.
For retirement savings, consider a Traditional IRA or Roth IRA.
If your employer offers a 401(k) through Fidelity, that's another important account to understand.
Step 3.3: Open Your Account Online
Fidelity's account opening process is typically quick and straightforward.
Visit the Fidelity Website: Go to Fidelity.com and look for the "Open an Account" option.
Select Account Type: Choose the type of account you wish to open (e.g., "Brokerage Account," "IRA").
Provide Personal Information: You'll need to provide details such as:
Your Social Security Number (SSN)
Date of birth
Residential address
Employment information
Financial information (e.g., income, net worth – this helps Fidelity understand your risk profile)
Review and Submit: Carefully review all the information you've entered before submitting your application. Fidelity may need to verify your identity, sometimes requiring additional documentation.
Step 3.4: Fund Your Account
Once your account is open, it's time to put money into it! Fidelity offers several convenient ways to fund your account:
Electronic Funds Transfer (EFT): Link your bank account (checking or savings) to your Fidelity account for easy online transfers. This is usually the quickest and most common method.
Direct Deposit: Set up direct deposit from your paycheck or other income sources.
Wire Transfer: For larger, time-sensitive transfers.
Check Deposit: Deposit a physical check via mail or the Fidelity mobile app (mobile check deposit).
Transfer from Another Brokerage: If you have an existing account at another brokerage, you can initiate a transfer of assets (TOA) to Fidelity. This can be done in cash (selling investments first) or in specie (transferring the investments themselves).
Step 3.5: Start Investing!
With your account funded, the exciting part begins: investing!
Sub-heading 3.5.1: Choose Your Investment Approach
DIY (Do-It-Yourself): If you enjoy researching and selecting individual stocks, ETFs, and mutual funds, Fidelity provides all the tools you need.
Robo-Advisor (Fidelity Go): For a hands-off approach, Fidelity Go builds and manages a diversified portfolio for you based on your financial goals and risk tolerance. There's no minimum to open, but a $10 minimum is needed for investment.
Managed Accounts: For more personalized guidance and a human touch, Fidelity offers various managed account options where advisors build and oversee your portfolio for a fee.
Fractional Shares: Don't have enough to buy a whole share of a high-priced stock? Fidelity allows you to buy fractional shares, meaning you can invest a specific dollar amount, even if it's less than the price of one share. This is fantastic for beginners with smaller budgets.
Sub-heading 3.5.2: Placing Your First Trade
Search for an Investment: Use the search bar on Fidelity's website or app to find the ticker symbol (e.g., AAPL for Apple) of the stock, ETF, or mutual fund you want to buy.
Research (Crucial Step!): Before buying, use Fidelity's research tools to analyze the investment. Look at its historical performance, company financials (for stocks), expense ratios (for funds), and expert ratings. Don't skip this step!
Enter Order Details:
Action: Buy
Quantity: Number of shares or dollar amount (if fractional shares are available).
Order Type:
Market Order: Buys or sells at the best available price immediately. Be cautious with this for volatile assets.
Limit Order: Buys or sells only at a specified price or better. This gives you more control.
Time in Force: How long the order remains active (e.g., "Day," "Good 'til Canceled").
Review and Place Order: Double-check all the details before confirming your trade.
Step 4: Managing and Monitoring Your Investments
Investing isn't a "set it and forget it" activity. Regular monitoring and adjustments are important.
Sub-heading 4.1: Regular Portfolio Review
Set Reminders: Schedule regular times (e.g., quarterly, semi-annually) to review your portfolio.
Check Performance: See how your investments are performing against your goals.
Rebalance: If your asset allocation has drifted significantly (e.g., stocks have grown much faster than bonds), consider rebalancing to bring it back in line with your target risk level.
Assess Contributions: Are you contributing enough to reach your goals? Consider increasing your contributions if possible.
Sub-heading 4.2: Utilizing Fidelity's Planning Tools
Fidelity offers a suite of planning tools to help you stay on track:
Planning & Guidance Center: Create and monitor multiple financial goals.
Retirement Calculators: Estimate your retirement income needs, evaluate Roth conversions, and more.
Savings Planner: Helps you create a plan to save and pay down debt.
Sub-heading 4.3: Staying Informed
Continuously learn: Read articles from Fidelity's learning center, attend webinars, and stay updated on market news.
Monitor alerts and watchlists: Set up alerts for price changes or news related to your holdings or watchlisted securities.
Fidelity Investments: Pros and Cons at a Glance
Like any financial institution, Fidelity has its strengths and weaknesses.
Pros:
Low Costs and Fees: $0 commissions on online U.S. stock, ETF, and options trades (with a $0.65 per contract fee for options). Many no-fee mutual funds.
Diverse Investment Options: A very wide range of choices for all investor types.
Excellent Research and Tools: Top-notch research, screeners, and analytical capabilities.
Strong Customer Service: Generally well-regarded for knowledgeable and responsive support, available 24/7.
Fractional Share Investing: Allows you to invest with smaller amounts.
High-Quality Trading Platforms: From a user-friendly website and mobile app to the advanced Active Trader Pro.
Comprehensive Retirement Solutions: A wide array of IRA and workplace retirement plans.
No Payment for Order Flow: This means Fidelity seeks the best execution for your trades, potentially leading to better prices.
Cons:
Options Contract Fee: While trades are commission-free, the $0.65 per contract fee can add up for high-volume or multi-leg options traders.
No Futures or Spot Forex Trading: Not suitable for traders interested in these specific markets.
Mobile App for Advanced Users: While good for general use, some advanced features found on Active Trader Pro are not available on the mobile app.
Limited Cryptocurrency Offerings: Only a few major cryptocurrencies are available for direct trading.
Broker-Assisted Trade Fee: A relatively high fee if you place trades over the phone with a broker.
10 Related FAQ Questions
How to open a Fidelity Investments account?
To open a Fidelity account, visit their website, choose your desired account type (e.g., brokerage, IRA), provide personal details like SSN and employment info, and submit the application. The process is typically quick and can be completed online.
How to invest in stocks with Fidelity Investments?
Once your Fidelity account is funded, use the search bar to find a stock by its ticker symbol. Research the company using Fidelity's tools, then select "Buy," enter the number of shares or dollar amount (for fractional shares), choose an order type (e.g., limit order), and place your trade.
How to transfer money to Fidelity Investments?
You can transfer money to Fidelity via Electronic Funds Transfer (EFT) by linking your bank account, setting up direct deposit, sending a wire transfer, depositing a physical check, or initiating a Transfer of Assets (TOA) from another brokerage firm.
How to buy mutual funds on Fidelity Investments?
Navigate to the mutual funds section on Fidelity.com, use their screeners to find funds that match your criteria (e.g., Fidelity Zero funds for no expense ratio), review the fund's prospectus, and then place a buy order, specifying the dollar amount you wish to invest.
How to use Fidelity's Active Trader Pro?
Active Trader Pro is a downloadable desktop platform designed for active traders. You can download it from the Fidelity website, log in with your credentials, and then utilize its advanced charting, real-time data, complex order types, and customizable layouts for more sophisticated trading strategies.
How to set up retirement planning with Fidelity Investments?
Fidelity offers various retirement accounts like IRAs and 401(k)s. You can open an IRA online, contribute regularly, and utilize their Planning & Guidance Center and retirement calculators to create a personalized savings and investment roadmap.
How to contact Fidelity Investments customer service?
Fidelity provides 24/7 customer service via phone. You can find their contact numbers on the "Customer Service" section of their website. They also offer online chat support and have numerous investor centers across the U.S. for in-person assistance.
How to view my investment performance on Fidelity?
Log in to your Fidelity account on the website or mobile app. Your portfolio dashboard will display your account balances, investment performance, and allocation. You can typically drill down into specific holdings to see their individual performance.
How to sell investments on Fidelity Investments?
To sell an investment, navigate to your portfolio or the specific security, select the "Sell" option, enter the number of shares you wish to sell, choose your order type (e.g., limit order), and review and confirm your trade.
How to access research tools on Fidelity Investments?
Fidelity's research tools are readily available on their website and trading platforms. You can find independent analysis, screeners for various asset classes (stocks, ETFs, mutual funds), news feeds, and educational articles within the "News & Research" section or directly when viewing a specific security.
