Fidelity is one of the largest financial services companies in the world. With trillions of dollars under management, Fidelity offers a wide range of investment products and services. Many investors on Reddit have discussed using Fidelity for conservative short term investments. Here are some key tips on how to best utilize Fidelity’s offerings.
Focus on money market funds
Fidelity’s money market funds are a great option for conservative investors looking for principal stability. The Fidelity Government Money Market Fund (SPAXX) invests in short-term U.S. Treasury securities and offers competitive yields with low expense ratios. Many Redditors recommend parking cash here for stability and liquidity.
Use short-term bond funds
For slightly higher returns, Fidelity’s short-term bond funds can provide extra income over money markets while limiting volatility. The Fidelity Limited Term Bond Fund (FLTBX) invests in investment grade bonds with an average duration of 2-3 years. The added diversification can help conservative investors earn more yield.
Stick to low-cost index funds
Fidelity offers a wide selection of low-cost index funds, many with no minimum investment required. The Fidelity Zero Total Market Index Fund (FZROX) provides exposure to the entire U.S. stock market with a 0% expense ratio. While equities come with higher volatility, index funds can be a prudent way for conservative investors to participate in upside.
Use FDIC-insured CDs and savings
For FDIC insurance up to $250,000, Fidelity’s CDs offer fixed rates with varying maturities. The Fidelity Government Money Market Fund is also FDIC-insured. Adding FDIC-insured products can help conservative investors protect against market fluctuations.
In summary, Fidelity has a range of options suitable for conservative, short-term investors including money market funds, short-term bond funds, index funds and FDIC products. Focusing on stability, liquidity and diversification can help investors achieve their goals.