Have I been investing in the wrong Fidelity Index Fund this whole time?

Investing
#1

When I first started learning with PFC and maxing out my Roth IRA, I chose 2055 FDEWX to invest all my Roth IRA funds. Obviously the market is doing poorly right now but I haven’t let that deter me from continuing to invest early and often.

However… taking a look at these other Index Fund options, I see that both the funds listed below are performing (both long-term and short-term) much much better than FDEWX.

  • Fidelity 500 Index Fund FXAIX
  • FSKAX Total Market Index Fund

What are some thoughts on switching future investments and saying goodbye to FDEWX?

#2

Hi @kcrowston!

Thank you for your question! FDEWX is more diversified than the other two tickers that you listed. Notably, FDEWX has exposure to international stocks. International stocks have meaningfully lagged the U.S. stock market over the last decade or so. This is one of the main reasons that funds that only invest in the U.S. stock market have outperformed target date funds. Overtime, there tend to be long periods of the U.S. stock market outperforming AND long periods of the international stock market outperforming.

This is a PFC post from a couple of years ago that highlights this.

As far as what you should do from here, that’s a personal choice. Any of the options you have listed are great funds to build wealth with over time!

I hope this helps. Let us know if you have any other questions.

Shane