Tuesday, July 22, 2008

I Am an Investor

As of this morning I am the proud owner of 92.034 shares of Fidelity's Four-in-one Index (FFNOX) purchased at $27.18 per share. I finally reached the $2,500 minimum necessary for a retirement account to buy into this fund, which I decided upon after some lengthy research. I wanted to go after an index fund that tracked the S&P but unfortunately the one I really want, the Spartan 500 Index Fund (FSMKX), has a minimum buy-in of $10,000 (with a gorgeous 0.10% expense ratio!).

So I put my $2,501.72 into FFNOX for now, and I plan on this being my sole IRA investment vehicle until I can sell out and buy into FSMKX. The cool thing about FFNOX is that it is comprised of four funds: FSMKX, the Spartan Extended Market Index Fund (FSEMX - with at least 80% of assets in the Dow Jones Wilshire 4500 Completion Index), the Spartan International Index Fund (FSIIX - tracks the performance of foreign stock market indices), and the U.S. Bond Index Fund (FBIDX - tracks a mix of U.S. bonds).

FFNOX has a nice expense ratio of 0.23%, which works for me for now. It's also got me diversified within a single fund, with 70.30% of the fund in U.S. equities, 15.40% in international equities, and 14.30% in investment grade bonds. While I don't think these asset allocations are exactly right for me at this point (too heavy on bonds, which should be minimal considering my age and investment horizon) they are fairly diverse within this fund, and should help temper the volatility of the fund over time - right?

The main thing is that now is the first time I can actually say: I am an investor! An impecunious one, for sure, but an investor nonetheless. I own a piece of American (and international) business! This is very exciting for me.

Now...the boring part. Keep investing every month for the next 30 years, don't touch my investments aside from tweaking asset allocations and watch my retirement nest egg grow (hopefully).

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