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Matthew Diaz
Matthew Diaz

Can I Buy Stocks In My Fidelity 401k

Brokerage account: When people talk about trading stocks, they're typically talking about doing so in a brokerage account. You can think of a brokerage account as your standard-issue investment account. Here are the basics:

can i buy stocks in my fidelity 401k


Target Date Funds are an asset mix of stocks, bonds and other investments that automatically becomes more conservative as the fund approaches its target retirement date and beyond. Principal invested is not guaranteed.

A 401(k) self-directed brokerage account, also known as a 401(k) brokerage window, is an alternative to the traditional mutual funds -- collections of stocks and bonds -- and annuities, which are contracts with insurance companies, commonly available through 401(k)s. Your employer picks a brokerage firm to work with, and you create an account with the firm and invest your retirement savings in mutual funds, individual stocks and bonds, exchange-traded funds (ETFs), and more -- with all the tax advantages of a traditional 401(k). However, options trading and borrowing on margin are not allowed through these accounts.

BrokerageLink gives you the ability to open a brokerage account within your 401k. This opens the universe of available investment choices to a much broader spectrum of securities. Some companies limit the types of investments you can own or the percentage of your 401k that can be moved into the BrokerageLink account. Still, the wider selection of thousands of investment choices increases the level of diversification you can achieve and may give you access to investments that are superior to those offered in the standard 401k plan.

Many of our clients rely on us to manage their 401k or 403b accounts, and access to a brokerage window such as BrokerageLink greatly enhances our ability to add value to their plan. For those who work for Chevron, Cemex, Memorial Hermann, and Houston Methodist Hospital, we can link directly to their Fidelity BrokerageLink account.

Another benefit is that it may also be possible to reduce the internal costs of the funds in your 401k plan by using the exchange traded funds (ETFs), index funds, and in many cases, institutional share class mutual funds available through your brokerage window.

Buying individual stocks can be enticing, especially when you can buy into them for next-to-nothing, but you first should have exposure to all different sorts of companies and sectors. Put all of your eggs in one basket, and, well, you better hope nothing happens to that basket. CNBC's Jim Cramer recommends that the first $10,000 you invest go to a low-cost index fund or exchange-traded fund that mirrors the S&P 500.

"The individual investor is better suited by investing in mutual funds and exchange-traded funds," says Bankrate's McBride. "But the lure of individual stocks is always there. On some level, so is the belief that doing so enables the investor to beat the market, which has proven not to be true."

Funds that hold stocks and bonds, otherwise known as balanced funds, are typically considered moderate all-in-one funds. But Fidelity Balanced is a little turbocharged. It typically holds an above-average stake in stocks compared with the peer group, funds that allocate 50% to 70% of assets to stocks.

FBGRX holds stocks in more than 500 companies, at last count. But the portfolio is top-loaded. For instance, the largest 10 holdings make up nearly half of the fund's assets. Companies below the 20th biggest holding represent stakes of less than 1% each of the fund's assets.

Kalra, who credits a team of 100-odd analysts with helping him to do his job (they're his "eyes, ears and feet on the street"), has positioned Fidelity Blue Chip Growth for an economic rebound, with a tilt toward cyclical stocks. In mid-2021, he added to stakes in Airbnb (ABNB (opens in new tab)) after shares pulled back and in Tesla (TSLA (opens in new tab)), which he says will see an increase in demand for its vehicles once the supply-demand dynamic improves across the auto industry.

Wymer holds close to 500 stocks in the fund, with a heavy tilt toward information technology companies, such as Nvidia (NVDA (opens in new tab)), (CRM (opens in new tab)) and Shopify (SHOP (opens in new tab)), as well as communications services firms, such as Google parent Alphabet, social media firm Facebook, and Roku (ROKU (opens in new tab)), the streaming-device company.

Economically sensitive stocks have recently given back some of their leadership to secular growth stocks, Wymer says in a recent report. "The outperformance of a stock or sector in the months ahead will be driven more by individual fundamentals than macro factors or trends," he says. That's why he's focused on companies with a strong outlook based on fundamentals.

Some things have changed over the years. Tillinghast now has five comanagers, though he still runs about 95% of fund's assets. In the fund's early days, stocks had to be $15 or less at the time of purchase. A few years ago, the threshold jumped to $35, or the stock has to boast an earnings yield that falls at or above the median for the small-company Russell 2000 index, which is still the fund's benchmark. Low-Priced Stock also owns more foreign stocks than it did in its earliest days. At last report, 35% of assets were invested in international shares, mostly in Europe and Japan.

Lately, Kelley has loaded up on retail stocks that might benefit from pent-up demand from consumers as well as financials, which stand to gain from improved loan demand as the economy reopens. A rise in interest rates, if it happens, would be a bonus for banks, too. Bank of America (BAC (opens in new tab)) and Wells Fargo (WFC (opens in new tab)) were top bank holdings at last report.

Fidelity Puritan is best for moderate investors who want an all-in-one portfolio solution for stocks and bonds. Under Kelley, who has run the fund for just over three years, Puritan has turned in above-average returns with below-average volatility.

This particular fund is designed for investors who plan to retire around the year 2030; that puts them in their mid-50s today. It holds 64% of its assets in stocks (39% in U.S. stocks and 25% in foreign shares), 35% in bonds and 1% in cash. As its name implies, it is comprised entirely of index funds (six, to be exact). Along with a total market U.S. stock fund and a total global (ex-US) stock fund, the 2030 fund also holds a bond fund that mirrors the Bloomberg U.S. Aggregate bond index, a long-term Treasury fund and an inflation-protected bond index fund.

Fidelity Freedom 2030 is the biggest in 401(k) plans. Geared toward retirement savers with just under a decade to go before they quit working, the fund currently holds 62% of its assets in stocks (30% is in U.S. stocks; 32%, in foreign shares); and 31% is in bonds, most of which is U.S. debt. The rest sits primarily in cash.

The fund seeks to provide investment returns that correspond, before fees and expenses, generally to the performance of the Fidelity High Dividend IndexSM. Normally investing at least 80% of assets in securities included in the Fidelity High Dividend Index and in depository receipts representing securities included in the index. The Fidelity High Dividend Index is designed to reflect the performance of stocks of large and mid-capitalization dividend-paying companies that are expected to continue to pay and grow their dividends.

Bitcoin had five days in the last year where it plunged by at least 10%. The stocks in the S&P 500, meanwhile, had only two such drops in the last 50 years. Beyond its volatility, there's still fundamental disagreement about how much a bitcoin is worth, or even if it's worth anything at all.

Proponents say cryptocurrencies can boost returns in a well diversified portfolio, without adding too much risk. That's because cryptocurrencies haven't always moved in the same direction as stocks and other investments, though they often have in recent months amid worries about rising interest rates.

A big part of the thrill of crypto for some traders is just how volatile it can be. Not only did bitcoin quadruple over 2020, but traders can buy and sell it 24 hours per day. A regular day for stocks on Wall Street, meanwhile, lasts just six and a half hours.

Choose from stocks, bonds, ETFs, mutual funds, CDs, and more. Schwab also offers professional portfolio management solutions that can make investing even easier. As a Schwab client, you can have a complimentary consultation with a Schwab investment professional who can help you decide which investments are right for you. Just give us a call at 866-855-5635. We're here and happy to help.

There are no fees to open or maintain a Rollover IRA at Schwab. You only pay fees for transactions you make in the account, such as trading stocks, or for investments you hold in the account, such as operating expenses on mutual funds. See the Charles Schwab Pricing Guide for Individual Investors and its amendments for comprehensive details on fees.

The Fidelity Large Cap Core Enhanced Index Fund selects 80% of its holdings from the S&P 500, utilizing quantitative data analysis methods to pick stocks with higher total returns than the overall index.

Launched in 1985, the Fidelity Growth and Income Portfolio has withstood the test of time. Although the name might suggest a blend of stocks and bonds, FGRIX is predominantly a stock fund, with 83% of holdings in U.S. companies and the remainder in international stocks.

FLPSX strives to invest 80% of its holdings in stocks priced at or below $35 per share with a higher price-to-earnings (P/E) ratio than its Russell 2000 Index benchmark. The fund currently invests 61% in U.S. equities and 34% in international equities, including developed and emerging markets. The remainder is held in cash.

Balanced funds are a type of mutual fund that owns both stocks and bonds, aiming to generate both appreciation and income for holders. The Fidelity Balanced Fund holds 65% in U.S. equities, 4% in international equities, and 31% in bonds, making it a complete portfolio in one fund. 041b061a72


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