Fidelity Freedom Funds: What You MUST Know!

An episode of the The Josh Scandlen Podcast podcast, hosted by Josh Scandlen, titled "Fidelity Freedom Funds: What You MUST Know!" was published on February 28, 2019 and runs 18 minutes.

February 28, 2019 ·18m · The Josh Scandlen Podcast

0:00 / 0:00

Summary

Fidelity Freedom Funds made DRASTIC changes to their approach in 2014.   Consequently, they've improved  performance numbers significantly.  Is this a reason you should now reconsider their funds though? In this video we discuss the changes Fidelity made to their management approach to their Freedom Funds and why they made the changes to begin with. Turns out Fidelity has been underperforming for years and assets were flying out the door. So, to stem the outflow FIdelity made their Freedom MUCH more aggressive.  Now their Freedom 2020 Fund is 50% more aggressive than their average peer.  The results since they made the change have paid off, as their performance has improved quite a bit. But this should come as no surprise.  Increased exposure to stocks, when the stock market is booming, equals greater performance. No getting around that.  However, Fidelity continues to bleed assets out of its Freedom Funds.  They have not been able to stem the flow even while their numbers have improved.  They still have BILLIONS UPON BILLIONS of dollars in these funds though.  My concern is what happens when the next bear comes around?  Well, the ten day period of this year (2018) at the end of January and into February gave us a look.  In those ten days, the Fidelity Freedom 2020 Fund was down 6%! Remember a lot of people invest in the earlier years target/freedom/lifecycle/lifestrategy funds because they assume these funds have less risk. Yet, Fidelity 2020 fund has 60% stocks!  That's not less risk by any stretch and can be witnessed by a 6% decline in a ten day period we just saw. Now being more aggressive is not a good or bad thing. In fact, one can easily make the case being 60% stocks for someone who is going to retire in 2 years and expects to live for another 30 years is actually a smart move.  But, But, BUT, does that investor realize that the fund he is investing in is that aggressive? I suspect not.   And that's what you need to know.  Understand your investments! For more financial planning related information such as this, please subscribe and go to www.joshscandlen.com.  Thanks! ================================= If you like what you see, a thumbs up helps A LOT. So, give me a thumbs up, please! Don't forget to SUBSCRIBE by clicking here: https://www.youtube.com/channel/UCSEz... GET MY BOOK:   Strategic Money Planning: 8 Easy Ways To Put Your House In Order It's FREE if you're a Kindle Unlimited Subscriber! https://amzn.to/2wKGi50 GET ALL MY LATEST BLOGPOSTS: http://heritagewealthplanning.com/blog/ PODCAST: https://itunes.apple.com/us/podcast/j... LET'S SOCIALIZE! Facebook: http://Facebook.com/heritagewealthpla... Linkedin: https://www.linkedin.com/in/joshscand... Quora: https://www.quora.com/profile/Josh-Sc... Google +: https://plus.google.com/u/1/108893802...

Episode Description

Fidelity Freedom Funds made DRASTIC changes to their approach in 2014.

Consequently, they've improved performance numbers significantly.

Is this a reason you should now reconsider their funds though?

In this video we discuss the changes Fidelity made to their management approach to their Freedom Funds and why they made the changes to begin with.

Turns out Fidelity has been underperforming for years and assets were flying out the door.

So, to stem the outflow FIdelity made their Freedom MUCH more aggressive. Now their Freedom 2020 Fund is 50% more aggressive than their average peer.

The results since they made the change have paid off, as their performance has improved quite a bit. But this should come as no surprise.

Increased exposure to stocks, when the stock market is booming, equals greater performance. No getting around that.

However, Fidelity continues to bleed assets out of its Freedom Funds. They have not been able to stem the flow even while their numbers have improved.

They still have BILLIONS UPON BILLIONS of dollars in these funds though.

My concern is what happens when the next bear comes around?

Well, the ten day period of this year (2018) at the end of January and into February gave us a look.

In those ten days, the Fidelity Freedom 2020 Fund was down 6%!

Remember a lot of people invest in the earlier years target/freedom/lifecycle/lifestrategy funds because they assume these funds have less risk.

Yet, Fidelity 2020 fund has 60% stocks! That's not less risk by any stretch and can be witnessed by a 6% decline in a ten day period we just saw.

Now being more aggressive is not a good or bad thing. In fact, one can easily make the case being 60% stocks for someone who is going to retire in 2 years and expects to live for another 30 years is actually a smart move.

But, But, BUT, does that investor realize that the fund he is investing in is that aggressive? I suspect not.

And that's what you need to know. Understand your investments!

For more financial planning related information such as this, please subscribe and go to www.joshscandlen.com.

Thanks!

=================================

If you like what you see, a thumbs up helps A LOT. So, give me a thumbs up, please!

Don't forget to SUBSCRIBE by clicking here: https://www.youtube.com/channel/UCSEz...

GET MY BOOK:

Strategic Money Planning: 8 Easy Ways To Put Your House In Order

It's FREE if you're a Kindle Unlimited Subscriber!

https://amzn.to/2wKGi50

GET ALL MY LATEST BLOGPOSTS: