The Only 3 Fidelity Funds You Will EVER Need: Simplify Investing For Life

If you’ve ever felt totally swamped by all the investment options out there, or like you need a finance degree just to figure out where to put your money, then trust me, you’re not alone.

But what if I told you that for your entire stock portfolio, for your entire life, you need just three super powerful, low-cost funds from Fidelity? Seriously, it’s not a magic trick; it’s just smart investing. This is my exact setup for most of my investment accounts.

Today, we’re cutting through all that confusion to show you how you can totally simplify your money game. We’re talking about FSKAX, FTIHX, and FXNAX. These three Fidelity funds, when you put them together the right way, give you amazing coverage, keep your fees super low, and let you pretty much set it and forget it. This strategy can work for you from your very first job all the way to retirement. So, let’s break down why this simple setup could be your financial superpower.

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Why Keep It Simple? And Why Diversify Like Crazy?

Look, when it comes to investing, trying to make things too complicated usually just ends up making you stressed out or making bad decisions. The great thing about this three-fund plan is how easy it is. You’re not trying to pick the next Amazon stock, guess what the market’s going to do next week, or spend hours reading economic reports. Nope. You’re just riding the big wave of the global economy growing over time.

The main idea here is spreading your money around a lot – like, a lot a lot. By owning these three funds, you’re not just putting your eggs in one basket, or even a few baskets. You’re basically investing in thousands of companies across the whole U.S. stock market, thousands more internationally, and a ton of solid U.S. bonds. This huge spread significantly cuts down your risk compared to just buying individual stocks.

Think of it this way: if one company or even one whole industry has a bad year, your entire portfolio won’t crash because its ups and downs are balanced out by all the other successful stuff you own. This basic strategy protects you from getting hit hard by problems with just one company, letting you sleep better at night knowing your money is diversified globally.

Meet the Big Three: FSKAX, FTIHX, and FXNAX

Alright, let’s get to know these awesome funds. Each one does something specific, but they all work together like a dream team for your money.

1. FSKAX: The All-American Stock Powerhouse

First up, we have FSKAX, the Fidelity Total Market Index Fund. This is your main player, your solid foundation for getting exposure to pretty much the entire U.S. stock market. When you buy FSKAX, you’re essentially getting a tiny piece of almost every publicly traded company in the U.S. – from the big guns like Nvidia and Google, all the way down to the smaller, growing companies.

It basically tries to copy how the whole U.S. stock market performs. So, what’s that mean for you? It means you’re not trying to guess which stocks will go up; you’re just hopping on the steady growth train of the American economy. Historically, the U.S. stock market has been a fantastic way to build wealth, and FSKAX lets you grab a piece of that broad success super efficiently.

Its fees are extremely low, at 0.015%. This means for every $10,000 invested, the annual fee would be just $1.50. That’s a HUGE deal for long-term investing. Even tiny differences in what you pay in fees can cost you a ton of money over years and years. FSKAX gives you affordable access to a super diverse mix of U.S. stocks – it’s a must-have for anyone investing for the long haul.

2. FTIHX: Your Passport to Global Growth

Next, we spread our wings to the rest of the world with FTIHX, the Fidelity Total International Index Fund. While FSKAX covers the U.S., FTIHX makes sure your portfolio has solid exposure to the rest of the world’s developed and emerging markets. This fund tracks a big global index, giving you access to companies in places like Europe, Asia, Australia, Canada, and Latin America.

Why is investing outside the U.S. so important? Because the U.S. market won’t always be the top performer, and having investments globally can help smooth out the bumpy rides and catch growth opportunities wherever they pop up. Think about it: cool new ideas and economic growth aren’t just happening in one country. By adding FTIHX, you’re getting a slice of companies like Toyota in Japan, Nestle in Switzerland, and Samsung in South Korea.

This fund keeps you from putting too much of your money just in your home country, which is a common mistake. A truly smart portfolio understands that the world is connected, and growth can come from anywhere. FTIHX gives you this important global variety with a ultra-low fee of 0.06%.

3. FXNAX: The Stability Superstar (Bonds!)

Finally, bringing balance and some calm to your portfolio is FXNAX, the Fidelity U.S. Bond Index Fund. This fund invests in a wide range of reliable U.S. bonds, including government bonds and corporate bonds. Its main goal is to follow how the overall U.S. bond market performs.

While stocks are all about growth, bonds usually play a different role: they offer stability, tend to be less wild, and provide a steady income. Especially when the stock market is acting crazy, bonds often hold their value or even go up, acting like a shock absorber for your portfolio.

As you get closer to retirement, or just decide you want less risk, putting more money into FXNAX can help protect your savings and make your portfolio less jumpy. It’s like the anchor that keeps your investment ship steady when the financial waters get rough, making sure you have a safer spot for some of your money. And yep, it also has a super low fee of 0.02%, so more of your money stays with you.

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The Game Plan: How to Adjust as You Age

Now that we know what each fund does, let’s talk about the secret sauce: asset allocation. This is all about how you split your money among these funds based on your own situation, how much risk you’re okay with, and when you’ll need the money. The awesome part about this three-fund setup is how flexible it is. Your portfolio isn’t set in stone. Instead, you change the percentages you put into each fund as your life changes and your money goals shift.

The general rule, often called a “glide path,” is to slowly move from having more stocks, FSKAX and FTIHX), to more bonds, FXNAX, as you get older. Why? Because when you’re younger, you have more time to bounce back if the market dips, so you can take on more risk for potentially bigger gains.

But as you get older and closer to retirement, protecting your money usually becomes more important. You have less time to recover from big losses, and your goal shifts from growing your money super-fast to keeping what you have and getting a steady income. That’s where bonds become your best friend, acting as a calming force.

Let’s look at some common examples by age, but remember, these are just starting points. You need to figure out what feels right for your risk level. The worst thing you can do is panic and sell when things get tough.

• In your 20s: You might go ultra-aggressive, like 100% stocks. Maybe something like 60% FSKAX and 40% FTIHX. You’ve got decades ahead to let your money grow!
• In your 30s: You should dial it back just a tiny bit, like 90% stocks and 10% bonds. So, maybe 55% FSKAX, 35% FTIHX, and 10% FXNAX. You’re still in the wealth-building phase, but we’re toning down the level of aggressiveness.
• In your 40s: A common split for this age range might be 80-85% stocks and 15-20% bonds. For example, 50% FSKAX, 35% FTIHX, and 15% FXNAX. You’re probably making good money and retirement is getting closer.
• In your 50s: You’ll keep shifting towards being more conservative, maybe 60-70% stocks and 30-40% bonds. An example could be 40% FSKAX, 30% FTIHX, and 30% FXNAX. Protecting that nest egg becomes super important.
• In your 60s and beyond (Retirement): Your bond portion might get much bigger, like 55% stocks and 45% bonds, or even more bonds depending on what you need for living expenses and other income. For instance, 25% FSKAX, 15% FTIHX, and 60% FXNAX. This gives you income and stability for your retirement years.

The cool thing is you don’t have to overthink it. Just check your percentages once a year, or when you add a bunch of new money, and make sure they match your target. This process of rebalancing is a smart move for long-term investing.

Why This Simple Plan Rocks!

Let’s do a quick recap of why this three-fund Fidelity portfolio is such a winner for your whole investing life:

1. Massive Diversification: You’re invested in thousands of companies worldwide and tons of bonds, which seriously cuts down your risk.
2. Super Low Costs: Index funds have tiny fees, meaning more of your hard-earned money stays working for you, not going to someone else’s paycheck. This can save you a fortune over the years!
3. Easy Peasy Management: No need to do crazy research or constantly check your investments. It’s truly a “set it and forget it” kind of deal, which frees up your time.
4. Tax Smart: Index funds are generally more tax-friendly than other types of funds because they don’t buy and sell stuff as often.
5. Proven to Work: Over the long run, these kinds of broad market index funds have historically beaten most fancy, actively managed funds. You’re basically betting on the overall growth of the entire global economy.
6. Flexible: You can easily change how much you put in each fund as you get older, making sure your investments always fit where you are in life.

Quick Tips Before You Dive In

While this three-fund plan is awesome for most people, here are a few things to keep in mind:

• Your Personal Risk Comfort: Even though age gives a good idea, how you feel about market ups and downs is key. If a 60/40 stock-to-bond split makes you nervous, just adjust it until you feel comfortable. The worst thing you can do is sell when the market drops because you can’t handle the stress.
• Emergency Fund First! Before you invest a single dollar, make sure you have a solid emergency fund. I recommend at least 6 months’ worth of living expenses. This is your financial safety net. But don’t save it at a regular savings account earning like 0.41%. Instead, open a high-yield savings account, like CIT Bank, and let that money grow more than 9x faster.
• Tackle Bad Debt: High-interest debt, like credit card debt, should generally be paid off before you seriously invest. Paying off that debt is like getting a guaranteed high return, often better than what you’d make investing.
• Use Retirement Accounts! Prioritize putting money into tax-advantaged accounts like your 401(k), 403(b), or IRA (Roth or Traditional). These accounts offer big tax perks that really boost your long-term growth.

To get started, if you don’t have one already, open a brokerage account with Fidelity, or on another platform where you’re able to buy Fidelity funds. Then, set up automatic contributions – even small ones – into these three funds. Remember, putting some money away consistently is your secret weapon. Check your allocation once a year and make those tweaks as you move through your life decades, slowly adding more bonds.

The Bottom Line

Building wealth for the long term doesn’t have to be rocket science. By going with the smart simplicity and amazing diversification you get from FSKAX, FTIHX, and FXNAX, you can build a strong, low-cost portfolio that’s designed to grow with you through every stage of life.

This strategy isn’t about chasing the next hot stock or trying to predict what the market will do tomorrow. It’s about being disciplined, thinking long-term, and using the incredible power of compound interest and the steady growth of the global economy. It’s about making your financial life less stressful and giving your money the best chance to grow.

So, if you’re ready to make investing simple and secure your financial future, definitely check out these three powerful Fidelity funds. They might just be the only ones you ever really need.