Investing in the stock market can be a daunting task, especially for beginners. However, with the advent of automation, investing has become more accessible and convenient than ever. Fidelity, one of the largest and most reputable investment companies, offers a range of automatic investment options that can help you grow your wealth over time. In this article, we will take you through a step-by-step guide on how to set up automatic investment with Fidelity, so you can start building your financial future with confidence.
Understanding Automatic Investment
Before we dive into the setup process, it’s essential to understand what automatic investment means and how it works. Automatic investment, also known as dollar-cost averaging, is a strategy that involves investing a fixed amount of money at regular intervals, regardless of the market’s performance. This approach helps you:
Reduce market volatility: By investing a fixed amount regularly, you’ll buy more shares when the market is low and fewer shares when it’s high, averaging out the cost over time.
Avoid emotional decisions: Automatic investment takes the emotion out of investing, as you’re not tempted to buy or sell based on market fluctuations.
Take advantage of compound interest: Consistent investing helps your money grow over time, thanks to the power of compound interest.
Preparing for Automatic Investment with Fidelity
Before setting up automatic investment with Fidelity, make sure you have the following:
Fidelity account: If you don’t already have a Fidelity account, open one by visiting their website or mobile app.
Funding source: Set up a funding source, such as a bank account or another investment account, to transfer funds to your Fidelity account.
Clear investment goals: Define your investment goals, risk tolerance, and time horizon to determine the best investment strategy for you.
Step-by-Step Guide to Setting Up Automatic Investment with Fidelity
Now that you’re prepared, follow these steps to set up automatic investment with Fidelity:
Step 1: Log in to Your Fidelity Account
Log in to your Fidelity account online or through the mobile app. If you’re using the app, make sure you have the latest version.
Step 2: Navigate to the Automatic Investment Page
Click on the “Accounts” tab and select “Automatic Investments” from the dropdown menu.
Step 3: Choose Your Investment Frequency
Decide how often you want to invest: weekly, bi-weekly, monthly, or quarterly. You can also choose a specific date for your investments.
Step 4: Select Your Investment Amount
Determine how much you want to invest each period. You can choose a fixed amount or a percentage of your available cash.
Step 5: Select Your Investment Options
Choose the Fidelity funds or ETFs you want to invest in. You can select from a range of options, including index funds, mutual funds, and sector-specific ETFs.
Step 6: Set Up Your Funding Source
Link your funding source to your Fidelity account. This will enable automatic transfers from your funding source to your Fidelity account.
Step 7: Review and Confirm
Review your automatic investment settings to ensure everything is correct. Confirm your setup, and Fidelity will take care of the rest.
Tips and Considerations for Automatic Investment with Fidelity
To get the most out of your automatic investment setup, keep the following tips in mind:
Start small: Begin with a manageable amount and gradually increase it over time.
Be consistent: Stick to your investment schedule, even during market fluctuations.
Monitor and adjust: Regularly review your investment portfolio and rebalance as needed to ensure it remains aligned with your goals.
Take advantage of tax-advantaged accounts: Utilize tax-advantaged accounts such as IRAs or 401(k)s to optimize your investments.
Benefits of Automatic Investment with Fidelity
By setting up automatic investment with Fidelity, you’ll enjoy the following benefits:
Convenience: Invest regularly without having to manually transfer funds or monitor the market.
Discipline: Stick to your investment plan, avoiding emotional decisions and market timing.
Flexibility: Adjust your investment amount, frequency, or options as your goals and circumstances change.
Cost-effective: Reduce transaction costs by investing small amounts regularly.
Expert management: Fidelity’s experienced investment professionals manage the funds, ensuring your investments are optimized for growth.
Conclusion
Setting up automatic investment with Fidelity is a straightforward process that can help you achieve your long-term financial goals. By following this step-by-step guide and keeping the tips and considerations in mind, you’ll be well on your way to building wealth over time. Remember to start small, be consistent, and monitor your investments regularly to ensure you’re on track to achieving your financial objectives. With Fidelity’s expertise and automatic investment options, you can automate your wealth-building journey and focus on the things that matter most to you.
What is automatic investing and how does it benefit me?
Automatic investing is a process where a fixed amount of money is invested at regular intervals, regardless of the market’s performance. This approach helps you invest consistently and avoid emotional decisions based on market fluctuations. By automating your investments, you can take advantage of dollar-cost averaging, which reduces the impact of market volatility on your investments.
Additionally, automatic investing helps you develop a disciplined investment habit and reduces the likelihood of procrastination. It’s an easy way to invest in the stock market, even if you’re new to investing or don’t have a lot of money to start with. With Fidelity’s automatic investment feature, you can set up a customized investment plan that fits your financial goals and risk tolerance.
What do I need to get started with automatic investing on Fidelity?
To get started with automatic investing on Fidelity, you’ll need to open a brokerage account if you don’t already have one. You’ll also need to fund your account with an initial deposit, which can be as low as $0. Once you’ve funded your account, you can set up an automatic investment plan by selecting the investment options that align with your financial goals and risk tolerance.
Fidelity’s online platform and mobile app make it easy to set up and manage your automatic investment plan. You can choose from a range of investment options, including index funds, ETFs, mutual funds, and individual stocks. You can also set up automatic transfers from your bank account to your Fidelity brokerage account to fund your investments.
How much money do I need to start automating my investments on Fidelity?
You can start automating your investments on Fidelity with as little as $0. Fidelity does not have a minimum balance requirement to open a brokerage account or set up an automatic investment plan. This means you can start investing with any amount of money you’re comfortable with, and Fidelity will invest it for you.
However, if you want to invest in mutual funds or other investment products, you may need to meet the minimum investment requirements for those specific products. But with Fidelity’s index funds and ETFs, you can start investing with no minimum balance requirement.
How do I set up an automatic investment plan on Fidelity?
Setting up an automatic investment plan on Fidelity is a straightforward process that can be completed online or through the mobile app. First, log in to your Fidelity account and select the “Accounts” tab. Then, click on the “Transfer” button and select “Automatic investments.” From there, you can choose the investment options you want to include in your automatic investment plan.
You’ll need to specify the amount you want to invest each month, the frequency of your investments, and the funding source for your investments. You can also set up automatic transfers from your bank account to your Fidelity brokerage account to fund your investments. Fidelity’s online platform and mobile app will guide you through the setup process, and you can always contact customer support if you need help.
Can I change or cancel my automatic investment plan on Fidelity?
Yes, you can change or cancel your automatic investment plan on Fidelity at any time. You can log in to your Fidelity account online or through the mobile app and make changes to your automatic investment plan. You can adjust the amount you’re investing, the frequency of your investments, or the investment options in your plan.
Keep in mind that if you cancel your automatic investment plan, you may miss out on the benefits of dollar-cost averaging and the discipline of regular investing. However, you can always restart your automatic investment plan at a later time if you change your mind.
Are there any fees associated with automatic investing on Fidelity?
Fidelity does not charge any fees for setting up or managing an automatic investment plan. You won’t pay any management fees, trading fees, or other charges for your investments. However, you may be subject to fees associated with the investment products you choose, such as expense ratios for mutual funds or ETFs.
It’s always a good idea to review the fees associated with your investment products before investing. Fidelity’s online platform and mobile app provide detailed information about the fees and expenses associated with each investment product.
Is my money safe with Fidelity’s automatic investment feature?
Yes, your money is safe with Fidelity’s automatic investment feature. Fidelity is a reputable and well-established online brokerage firm that is a member of the Securities Investor Protection Corporation (SIPC) and the Financial Industry Regulatory Authority (FINRA). Your investments are protected up to $500,000, including $250,000 in cash claims, through SIPC insurance.
Fidelity also uses robust security measures to protect your personal and financial information. Their online platform and mobile app use encryption and secure login protocols to ensure that your data is safe and secure. Additionally, Fidelity’s customer support team is available 24/7 to help you with any questions or concerns you may have.