Feeling a little overwhelmed by your investments? Perhaps your financial goals have shifted, the market has taken a turn, or you simply want to optimize your portfolio for better performance. Whatever the reason, taking control of your investments is a smart move, and Fidelity makes it relatively straightforward to adjust your holdings.
This comprehensive guide will walk you through the process of changing your investments within Fidelity, offering clear, step-by-step instructions and important considerations along the way. Get ready to empower your financial future!
Step 1: Understand Your "Why" and Assess Your Current Situation
Before you make any changes, let's take a moment to reflect. Why are you considering changing your investments? Is it:
Rebalancing: Has one asset class grown significantly, throwing your desired allocation off track?
Goal Shift: Have your short-term or long-term financial goals changed (e.g., saving for a house vs. retirement)?
Risk Tolerance Adjustment: Are you more or less comfortable with risk than when you first invested?
Market Outlook: Do you believe certain sectors or asset classes are poised for growth or decline?
Performance Review: Are some of your current investments consistently underperforming?
Consolidation/Simplification: Do you have too many different investments and want to streamline?
Sub-heading: Checking Your Current Allocation and Performance
Fidelity offers excellent tools to help you understand where you stand.
Log in to your Fidelity account: This is your central hub for all your investments.
Navigate to your Portfolio Summary: You'll typically find this on your homepage after logging in.
Explore the "Analysis" or "Planning & Guidance Center" sections: Here, Fidelity often provides visual breakdowns of your asset allocation (stocks, bonds, cash, etc.) across all your accounts.
Review individual holdings: Look at the performance of each specific mutual fund, ETF, or stock you own. Consider how they've performed over different timeframes.
Take notes on what you discover. Are you heavily weighted in one area? Are there any investments that consistently lag behind their benchmarks? This information will be crucial for the next steps.
Step 2: Define Your New Investment Strategy (or Reconfirm Your Old One)
Now that you know your "why" and "what you have," it's time to decide "what you want."
Sub-heading: Revisit Your Asset Allocation
Your asset allocation is the mix of different investment types in your portfolio (e.g., 60% stocks, 30% bonds, 10% cash). This is the most important decision you'll make.
Consider your time horizon: How long do you plan to invest this money? Longer horizons generally allow for more risk (higher stock allocation).
Assess your risk tolerance: How comfortable are you with potential market fluctuations? If a significant drop would cause you to panic and sell, a more conservative allocation might be better.
Align with your goals: If you're saving for a short-term goal, you might need a less volatile portfolio. Long-term goals like retirement can typically handle more growth-oriented investments.
Fidelity's guidance: Fidelity provides tools and resources to help you determine an appropriate asset allocation based on your profile. Look for "model portfolios" or "risk assessment" tools within their planning section.
Sub-heading: Researching New Investment Options (If Applicable)
If you're looking to introduce new investments or replace existing ones, Fidelity offers a vast array of choices:
Mutual Funds: Professionally managed funds that pool money from many investors to buy a diversified portfolio of stocks, bonds, or other securities. Fidelity has a wide selection of their own funds and thousands from other companies.
Exchange-Traded Funds (ETFs): Similar to mutual funds but trade like stocks on an exchange throughout the day. Often, they track an index (e.g., S&P 500).
Individual Stocks & Bonds: For those who want more direct control and are comfortable with the research involved.
Fidelity Go® or Managed Accounts: If you prefer professional management, Fidelity offers robo-advisors or human advisors who can manage your portfolio for you based on your risk profile and goals.
Utilize Fidelity's research tools: They have robust screeners and research pages for all investment types. Look at expense ratios (fees), historical performance, and diversification.
Step 3: Executing Your Investment Changes: Placing Trades
This is where you put your plan into action. The process will vary slightly depending on whether you're selling existing investments to buy new ones, or simply using new contributions to adjust your allocation.
Sub-heading: Selling Existing Investments (if needed for rebalancing)
If you need to reduce your holdings in certain investments to achieve your new allocation:
Log in to your Fidelity account.
Navigate to the "Trade" section. This is usually a prominent tab or button.
Select the account from which you want to sell.
Enter the symbol of the investment you wish to sell.
Choose "Sell" as the action.
Specify the quantity (number of shares or dollar amount) you want to sell.
Select your order type:
Market Order: Executes immediately at the best available price. Be cautious with this for large or volatile securities.
Limit Order: Allows you to set a specific price at which you're willing to sell. Your order will only execute if the market reaches that price. Generally recommended for more control.
Review and Confirm: Carefully check all the details before placing the order.
Important Tax Consideration: If you're selling investments in a taxable brokerage account at a profit, you'll incur capital gains taxes. Consider the tax implications and consult a tax professional if you have significant gains. In tax-advantaged accounts like IRAs or 401(k)s, sales generally don't trigger immediate tax events.
Sub-heading: Buying New Investments or Adding to Existing Ones
Once you have cash available (either from sales or new contributions), you can make your purchases.
Log in to your Fidelity account.
Navigate to the "Trade" section.
Select the account where you want to make the purchase.
Enter the symbol of the investment you wish to buy.
Choose "Buy" as the action.
Specify the quantity (number of shares or dollar amount). Fidelity often allows fractional share purchases for many stocks and ETFs, which can be helpful.
Select your order type:
Market Order: Executes immediately at the best available price.
Limit Order: Allows you to set a specific price at which you're willing to buy. Your order will only execute if the market reaches that price.
Review and Confirm: Double-check everything before placing the order.
Sub-heading: Utilizing Automatic Investments (for ongoing adjustments)
A fantastic way to maintain your desired allocation and implement dollar-cost averaging is to set up automatic investments.
Log in to your Fidelity account.
Go to "Transfers" or "Automatic Investments."
Set up a recurring transfer from your bank account to your Fidelity account.
Then, set up automatic investments into specific mutual funds or ETFs within your Fidelity account. You can direct these new contributions to investments that are currently underweight in your portfolio, helping you rebalance without needing to sell.
Step 4: Monitor and Rebalance Periodically
Changing your investments isn't a one-and-done event. It's an ongoing process.
Sub-heading: Regular Portfolio Reviews
Set a schedule: Decide how often you'll review your portfolio (e.g., quarterly, semi-annually, or annually).
Check performance: How are your investments performing relative to your expectations and benchmarks?
Reassess your goals and risk tolerance: Have things changed in your life that warrant a shift in your strategy?
Sub-heading: The Art of Rebalancing
Over time, your asset allocation will naturally drift as different investments perform better or worse. Rebalancing brings your portfolio back to your target allocation.
Calendar-based rebalancing: Rebalance on a fixed schedule (e.g., every January 1st).
Threshold-based rebalancing: Rebalance only when an asset class deviates by a certain percentage from its target (e.g., if stocks go from 60% to 65% of your portfolio).
Rebalancing with new contributions: As mentioned in Step 3, you can direct new money to underperforming or underweight asset classes to gradually bring your portfolio back into balance without selling. This is often the most tax-efficient method in taxable accounts.
Remember: Consistency is key! Regular monitoring and occasional rebalancing help ensure your portfolio remains aligned with your long-term financial objectives.
10 Related FAQ Questions
How to Check My Current Investment Allocation in Fidelity?
You can check your current investment allocation by logging into your Fidelity account, navigating to your "Portfolio Summary," and then looking for sections like "Analysis" or the "Planning & Guidance Center" which often provide visual breakdowns of your asset classes.
How to Sell a Specific Mutual Fund in My Fidelity Account?
To sell a mutual fund, log in, go to the "Trade" section, select the account, enter the mutual fund's symbol, choose "Sell," specify the dollar amount or number of shares, select your order type (often "NAV" for mutual funds), and then review and confirm your order.
How to Buy an ETF (Exchange-Traded Fund) on Fidelity?
To buy an ETF, log in, go to the "Trade" section, select the account, enter the ETF's ticker symbol, choose "Buy," specify the dollar amount or number of shares, select your order type (market or limit), and then review and confirm.
How to Set Up Automatic Investments in Fidelity?
Log in to your Fidelity account, go to "Transfers" or "Automatic Investments," and follow the prompts to set up recurring transfers from your bank account and then to automatically invest those funds into specific mutual funds or ETFs within your Fidelity account.
How to Find Research and Performance Data for Investments on Fidelity?
After logging in, navigate to the "News & Research" section. You can use search bars to find specific stocks, ETFs, or mutual funds, and then review their dedicated pages for performance charts, expense ratios, news, and analyst ratings.
How to Change My Risk Tolerance Settings in Fidelity's Planning Tools?
Within the "Planning & Guidance Center" or similar planning tools on Fidelity's website, there are usually sections where you can update your financial goals, time horizon, and risk tolerance. These updates will often adjust their suggested asset allocations.
How to Transfer Money from My Fidelity Brokerage Account to My Bank Account?
Log in to your Fidelity account, go to "Transfers" or "Cash Management," select "Withdrawals" or "Transfer Funds," choose your Fidelity brokerage account as the source and your linked bank account as the destination, enter the amount, and confirm.
How to Open a New Investment Account with Fidelity?
You can open a new account directly from the Fidelity homepage by clicking on "Open an Account." You'll typically need to choose the account type (e.g., Brokerage, IRA, Roth IRA) and provide personal information and funding details.
How to Get Financial Advice from a Fidelity Advisor?
You can find information on Fidelity's advisory services (Fidelity Go, Fidelity Managed FidFolios, or working with a human advisor) on their "Planning & Advice" or "Managed Accounts" sections. You can often schedule a free consultation online or by phone.
How to Deal with Taxes When Changing Investments in a Fidelity Brokerage Account?
When selling investments at a profit in a taxable brokerage account, you will incur capital gains taxes. Fidelity provides tax forms (like Form 1099-B) that detail your gains and losses. It's advisable to consult with a tax professional to understand the implications for your specific situation. For tax-advantaged accounts (IRAs, 401(k)s), changes generally don't trigger immediate tax events.
