Great content. At the end it would be nice to have a slide with all the numbers and fees. It is hard to memorize everything and have a real time comparison.
Great video. Thank you. My wife has opened a trad ira at Fidelity and wants to put a small bit of it into a portfolio and most of it into a cd. Would she be better off leaving tge lump in the SPAXX?
Thanks! Depends on CD rate vs. SPAXX yield and when the money is needed, but not really sure why one would hold either for very long in a Traditional IRA where you can't withdraw without penalty until age 59.5. Unless you're 58 or 59 years old.
I have a nice lump sum sitting in a HYSA getting 4.35% (im gonna be using it for a down payment on a house in the next couple years). Would I be better off transferring that entire account to fidelity and letting it sit in spaxx?
I'm not understanding what you mean by the 7-day yield of 5%. Is this an annual yield of 5% (as it currently stands in 2024), or do you just get interest for 7 out of 365 days? FDRXX says it has an expense ratio of 0.42% which seems like a whole lot, so I'm also not clear if that money is deducted every time I use the cash to purchase an investment, such as an S&P 500 fund. I've only gotten into this finance stuff a few years ago, so am still quite confused.
Annualized yield based on the average rate over the past 7 days. This provides a more recent, more accurate quote than the trailing 12-month yield. SEC yield is net of fees.
Man i need to start from the beginning or i need a video like this but for dummies because i have no idea what he was talking about pretty much the whole video 😂.. im way too new to invensting
@@OptimizedPortfolio well, isn’t the ultimate goal to save for retirement? I have SPAXX for three years now and I enjoy the $15. a month dividends that get reinvested into my Roth IRA.
The only Fidelity MM fund I really wanted to know about and the only one that may have a real difference is FDLXX, which is a pure play US treasuries only fund. I've heard that this fund may not be subject to Federal or state tax (not sure which one) but I haven't been able to confirm this for certain. If you can post some information about FDLXX that would be great.
Hey Chris, interest from FDLXX would be subject to federal income tax but would be exempt from state income taxes. This is the case for all US Treasury bonds and by extension, any fund that exclusively holds US Treasury bonds such as FDLXX and SGOV.
@@OptimizedPortfolio Thanks! I've also noticed that FDRXX has a lower expense ratio than all the others, 0.38% vs. 0.42%. I'm not sure why this is but it doesn't seem to make any real difference in it's overall performance as compared to the others assuming that the stats shown by Fidelity are including fees.
Yea there doesn't seem to be much rhyme or reason as to the different expense ratios Fidelity impose on these various funds, and they seem to change often. What may be a more useful comparison in this context is just to look at that 7-Day Yield aka SEC Yield, which is the fund's yield net of all fees.
At least for Virginia, income from government repurchase agreements are not tax deductible. Most of these MMFs are running around 50% income from repos in their composition by instrument. I also don't see Fidelity Treasury Only MMF (FDLXX) as a core position choice.
Thank you, and thanks for the timestamps! I recently converted core positions from SPAXX to FZFXX as I live in a high tax state. It is funny that we have to say "it may appear" as an option for you. Does anybody really know what determines which options we see? Maybe only Fidelity?
You're welcome! Thanks for watching and sharing your experience. Indeed. I'd guess probably account balance, date of account opening, account type, and self-selected experience level are determinants. No one knows.
Your statement at 1:19 has been a question of mine for a long time, and I haven't received any data-driving answers--just opinions. You said, “First, let’s get the obligatory reminder out of the way that market timing is usually more harmful than helpful, and dollar cost averaging is inferior to investing a lump sum on average, so you probably shouldn’t be holding much actual cash in the first place.” Suppose the hypothetical situation where I come into a lump sum of money, say $50,000. Would it be better to invest everything at once or invest $10,000 each month for 5 months? From your statement, it sounds like you would dump it all in at once. Is there data to show that? I know that, on average, the market goes up, so this is probably why you would rather get in early than spread it out. But in a shorter term (like 5 months) could there be volitility that would actually make spreading out the investment a better choice? I guess this is essentially hoping to "time the market." I'm just curious and wondering if there is mathematical evidence of which method is best and not just someones opinion.
Keep in mind when you do a transfer from your bank to Fidelity it goes and spaxx unless you change it Now, if you did that same transfer with Schwab or vanguard, it goes into some fixed cash account that pays significantly less and then you have to physically transfer that yourself to their money market Seems like a no-brainer, but how many people really make that other transfer Very few, I’m sure
If it's a brand new account at Fidelity, they ask you what the default investment should be, and the two options are FCASH and SPAXX. That is as of about a month ago at least.
What's your Fidelity Core Position?
Mine is FDIC
Because it is insured upto $250000
With this video I just learned that SPAXX is also insured up to $500,000 and pays higher interest
Perfect pacing & right to the point- don’t listen to that other commenter to slow down.
Thanks, Matthew!
Great Video...To the POINT, without any NONSENSE. Thank you for your efficient way of providing information.
Glad you enjoyed it!
Great content. At the end it would be nice to have a slide with all the numbers and fees. It is hard to memorize everything and have a real time comparison.
Thanks for the suggestion, Chris. Seems obvious; not sure why I didn't do that.
Thanks for the thorough, clear explanation! I'm staying with SPAXX for my Roth IRA. And may do the same when I open my brokerage account next month.
Thanks for sharing!
Mine's FCASH... never changed it, never messed with it. I only keep a small buffer amount on that anyways since almost all else is invested.
Awesome!
Great video. Thank you. My wife has opened a trad ira at Fidelity and wants to put a small bit of it into a portfolio and most of it into a cd. Would she be better off leaving tge lump in the SPAXX?
Thanks! Depends on CD rate vs. SPAXX yield and when the money is needed, but not really sure why one would hold either for very long in a Traditional IRA where you can't withdraw without penalty until age 59.5. Unless you're 58 or 59 years old.
Thank you this video helped alot😊
I'm glad!
I have a nice lump sum sitting in a HYSA getting 4.35% (im gonna be using it for a down payment on a house in the next couple years). Would I be better off transferring that entire account to fidelity and letting it sit in spaxx?
Depends on your personal goal(s), strategy, etc. Compare yields. You can always switch back.
This is helpful, thanks. I’m at Schwab but looks like they have a similar fund
Definitely!
I'm not understanding what you mean by the 7-day yield of 5%. Is this an annual yield of 5% (as it currently stands in 2024), or do you just get interest for 7 out of 365 days? FDRXX says it has an expense ratio of 0.42% which seems like a whole lot, so I'm also not clear if that money is deducted every time I use the cash to purchase an investment, such as an S&P 500 fund. I've only gotten into this finance stuff a few years ago, so am still quite confused.
Annualized yield based on the average rate over the past 7 days. This provides a more recent, more accurate quote than the trailing 12-month yield. SEC yield is net of fees.
Great info
Glad it was helpful!
So FCASH or FDIC... When does it actually pay interest?
I'd guess it accrues daily and pays monthly. Not 100% sure. Read the terms.
Man i need to start from the beginning or i need a video like this but for dummies because i have no idea what he was talking about pretty much the whole video 😂.. im way too new to invensting
Thanks for the feedback. Maybe I'll make a more beginner version explaining more of the fundamentals of this stuff.
I’m happy with SPAXX. It doesn’t matter which one you put your core cash. At the end of the day it’s all money for retirement.
Not necessarily. Some may have other short-term goals.
@@OptimizedPortfolio well, isn’t the ultimate goal to save for retirement? I have SPAXX for three years now and I enjoy the $15. a month dividends that get reinvested into my Roth IRA.
@@OptimizedPortfolio that is true, no matter what your goals saving money. My SPAXX is set up for Roth IRA retirement.
FDIC will make less $ over time because of the low APR no?
The only Fidelity MM fund I really wanted to know about and the only one that may have a real difference is FDLXX, which is a pure play US treasuries only fund. I've heard that this fund may not be subject to Federal or state tax (not sure which one) but I haven't been able to confirm this for certain. If you can post some information about FDLXX that would be great.
Hey Chris, interest from FDLXX would be subject to federal income tax but would be exempt from state income taxes. This is the case for all US Treasury bonds and by extension, any fund that exclusively holds US Treasury bonds such as FDLXX and SGOV.
@@OptimizedPortfolio Thanks! I've also noticed that FDRXX has a lower expense ratio than all the others, 0.38% vs. 0.42%. I'm not sure why this is but it doesn't seem to make any real difference in it's overall performance as compared to the others assuming that the stats shown by Fidelity are including fees.
Yea there doesn't seem to be much rhyme or reason as to the different expense ratios Fidelity impose on these various funds, and they seem to change often. What may be a more useful comparison in this context is just to look at that 7-Day Yield aka SEC Yield, which is the fund's yield net of all fees.
At least for Virginia, income from government repurchase agreements are not tax deductible. Most of these MMFs are running around 50% income from repos in their composition by instrument. I also don't see Fidelity Treasury Only MMF (FDLXX) as a core position choice.
Good observation. Thanks for sharing!
I have SPAXX. Also I have Fidelity Bloom.
Thanks for sharing!
Thank you, and thanks for the timestamps! I recently converted core positions from SPAXX to FZFXX as I live in a high tax state.
It is funny that we have to say "it may appear" as an option for you. Does anybody really know what determines which options we see? Maybe only Fidelity?
You're welcome! Thanks for watching and sharing your experience.
Indeed. I'd guess probably account balance, date of account opening, account type, and self-selected experience level are determinants. No one knows.
I use FDLXX
Thanks for sharing!
I use FDLXX.
Thanks for sharing!
Thanks
You're welcome!
@@OptimizedPortfoliotrying
I have an IRA account. My core position is FDRXX.
Thanks for sharing!
Your statement at 1:19 has been a question of mine for a long time, and I haven't received any data-driving answers--just opinions. You said, “First, let’s get the obligatory reminder out of the way that market timing is usually more harmful than helpful, and dollar cost averaging is inferior to investing a lump sum on average, so you probably shouldn’t be holding much actual cash in the first place.” Suppose the hypothetical situation where I come into a lump sum of money, say $50,000. Would it be better to invest everything at once or invest $10,000 each month for 5 months? From your statement, it sounds like you would dump it all in at once. Is there data to show that? I know that, on average, the market goes up, so this is probably why you would rather get in early than spread it out. But in a shorter term (like 5 months) could there be volitility that would actually make spreading out the investment a better choice? I guess this is essentially hoping to "time the market." I'm just curious and wondering if there is mathematical evidence of which method is best and not just someones opinion.
ruclips.net/video/zM8jFdhHUl4/видео.html
This is perfect and exactly what I've been looking for. Thanks for sharing.
@@dallasbateman2220 Glad it was helpful!
I have FDRXX
Thanks for sharing!
SPAXX
HaPpY NeW YeAr
Likewise!
SPAXX
Thanks for sharing!
Keep in mind when you do a transfer from your bank to Fidelity it goes and spaxx unless you change it
Now, if you did that same transfer with Schwab or vanguard, it goes into some fixed cash account that pays significantly less and then you have to physically transfer that yourself to their money market
Seems like a no-brainer, but how many people really make that other transfer
Very few, I’m sure
Thanks for pointing this out.
If it's a brand new account at Fidelity, they ask you what the default investment should be, and the two options are FCASH and SPAXX. That is as of about a month ago at least.
@@jimsmith3760 Thanks for sharing, Jim!
Lol, put it in SPANX.
Slow down. Talk too fast . Trying to write stuff down.
Thanks for the feedback. People used to say I talked too slowly. You can adjust playback speed by clicking the gear icon.