Why Automatically Invest and How to Automatically Invest in Fidelity

How to Automatically Invest in Fidelity

Why automatically invest in Fidelity? Investing in the stock market can be a daunting task, especially for beginners. However, automated investing can offer a solution by providing a convenient and effective way to grow your wealth over time. By automating your investments with Fidelity, you can take advantage of their expertise and resources to help you achieve your financial goals.

Automatically investing in Fidelity offers several benefits. Firstly, it allows you to take advantage of dollar-cost averaging. This strategy involves investing a fixed amount at regular intervals, regardless of market conditions. As a result, you buy more shares when prices are low and fewer shares when prices are high, potentially reducing the impact of short-term market fluctuations on your overall returns.

Secondly, automatic investing helps to eliminate emotional decision-making. It’s easy to get caught up in the excitement or fear surrounding market movements and make impulsive investment decisions that may not align with your long-term goals. By automating your investments, you remove the temptation to try and time the market or react impulsively to short-term volatility.

So how do you automatically invest in Fidelity? Fortunately, Fidelity offers various tools and services that make it simple for investors to set up automatic contributions into their chosen investment accounts. Whether it’s through employer-sponsored retirement plans like 401(k)s or individual brokerage accounts, Fidelity provides user-friendly online platforms where you can specify the desired contribution amount and frequency.

Benefits of Automatic Investing

Automatic investing offers several advantages that make it an appealing strategy for long-term financial growth. Here are some key benefits to consider:

1. Consistency: By setting up automatic investments, you ensure a regular and disciplined approach to saving and investing. It eliminates the need for manual intervention and helps you stay on track towards your financial goals.
2. Dollar-Cost Averaging: Automatic investing allows you to take advantage of dollar-cost averaging, which means buying more shares when prices are low and fewer shares when prices are high. This strategy can help mitigate the impact of market volatility over time.
3. Time-saving: With automatic investing, you can put your investment decisions on autopilot. Once you’ve set up your preferences, the system takes care of executing trades or allocating funds on your behalf. This frees up your time and energy for other important aspects of life.
4. Emotional Discipline: One common pitfall in investing is succumbing to emotional decision-making during market fluctuations. Automatic investing helps remove emotions from the equation by following a predetermined investment plan, reducing the likelihood of impulsive actions based on short-term market movements.
5. Compound Growth Potential: By consistently contributing to your investments over time, automatic investing harnesses the power of compounding returns. The earlier you start, the longer your investments have to grow exponentially over time.

How to Set Up Automatic Investments in Fidelity

Setting up automatic investments in Fidelity is a convenient way to stay consistent with your investment strategy and ensure that you’re regularly contributing to your portfolio. Whether you’re new to investing or a seasoned investor, automating your investments can help you take advantage of market opportunities and build wealth over time. Here’s a step-by-step guide on how to set up automatic investments in Fidelity:

1. Open an Account: To get started, you’ll need to open an account with Fidelity if you haven’t done so already. You can choose from various types of accounts such as individual brokerage accounts, IRAs, or employer-sponsored retirement plans.
2. Choose Your Investment Options: Once your account is open, it’s time to select the investment options that align with your financial goals and risk tolerance. Fidelity offers a wide range of investment choices including mutual funds, exchange-traded funds (ETFs), stocks, bonds, and more.
3. Determine Contribution Amount: Decide how much money you want to contribute automatically on a regular basis. This could be a fixed dollar amount or a percentage of your income. Keep in mind that it’s important to consider your budget and overall financial situation when determining the contribution amount.
4. Select Frequency: Next, choose how often you want the automatic contributions to occur—monthly, quarterly, or even semi-annually. Selecting a frequency that matches your cash flow and financial goals will help keep your investments on track.
5. Set Up Automatic Transfers: Now it’s time to set up automatic transfers from your bank account into your Fidelity investment account. Log in to your Fidelity account online or through their mobile app and navigate to the “Transfer” section where you can link your bank account details securely.
6. Schedule Contributions: Once the transfer setup is complete, schedule the recurring contributions according to the frequency you selected earlier (e.g., monthly, quarterly). Fidelity allows you to set up specific dates for these contributions or choose the option to invest as soon as funds become available.
7. Monitor and Adjust: After setting up automatic investments, it’s essential to regularly monitor your portfolio and make adjustments as needed. Overview your investment performance, rebalance if necessary, and consider increasing your contribution amount over time to maximise potential returns.