The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

Is My Money in Fidelity Investments Mutual Funds Fairly Safe?

Is My Money in Fidelity Investments Mutual Funds Fairly Safe

If you’re like most retirement investors, you’ve chosen to put a significant amount of your long-term savings into mutual funds, bonds, and stocks. These three investment classes generally provide long-term investors with the best possible risk-reward balance. Over many years, these vehicles tend to appreciate at several times the rate of inflation and experience relatively minor bouts of volatility. As such, they’re judged to be “safe” relative to more exotic investment vehicles like:

  1. Currencies
  2. Commodities
  3. Synthetic derivatives

Are My Mutual Funds From Fidelity Investments Really Safe?

However, all investments carry some risk. If you’ve invested in a basket of mutual funds from Fidelity Investments, you should be prepared to experience temporary losses and periods of gut-wrenching volatility. If you anticipate needing the money that you’ve placed in these funds within the next several years, you may wish to cut back on your exposure and place your hard-earned money in more stable investments. Although they won’t offer the same rates of return as your mutual funds, CDs and Treasury bonds are virtually guaranteed to retain their value and make regular interest payouts. As a rule, investors who plan on retiring within the next five years should keep the bulk of their savings in such low-risk vehicles.

Fidelity Investments Mutual Funds

If you’re younger, Fidelity Investments is a great place to put your money. Over the past several years, the company’s mutual funds have clearly outperformed the funds issued by well-respected firms like Vanguard and Morningstar. In addition, Fidelity is known for its fair cost structure and straightforward management strategy.

Unlike “fancier” mutual funds issuers like Franklin Templeton and the Hartford, Fidelity makes clear distinctions between its fund classes and rarely mixes asset types within specific funds. If you want to invest solely in large-cap stocks that pay steady dividends, there might be several Fidelity funds that fit your criteria. By contrast, some other firms’ funds might force you to hold positions in riskier technology stocks or commodity-based outfits as well.

In short, your money is fairly safe in a Fidelity Investments mutual fund. Although the recent financial crisis shook the confidence of millions of retirement investors and caused many to swear off the stock market on a permanent basis, it actually treated Fidelity customers fairly well. Aside from a year-long period during which most Fidelity funds declined by an average of 20 to 30 percent, the crisis had a manageable impact on the company’s bottom line. In fact, it actually gained customers in the wake of the turmoil.


This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.