Fidelity Freedom Fund 2050 vs. Domestic/International Funds?

I'm 25 and just opened a Roth IRA for $2,500 and want to know where a good place to invest my money is. I've research some of the funds and it shows that individual domestic and international mutual funds typically have much higher life rates of return than the Freedom Fund 2050 (FFFHX), but the advantage of the FFFHX is that I don't have to do anything to worry about my retirement. It is aggressive growth right now because I can tolerate risk but gets more conservative as I get closer to retirement - it does this automatically by the fund managers.

Other funds I have to manage myself and such and rebalance. I'm kind of stuck. What is your take on what I should do to get the most for my money? I want the highest rate of return but want it to be simple. And avoid fees(expense ratios)?

:) Thank you so much for your help!

C'mon...how busy can you be...that you can't look in on an investment six months or a year down the road? The Freedom Funds are indeed very convenient... but as far as being " aggressive"... that's hard to agree with! 9.7% last year ..and that's as risky as they are EVER going to be....
You are young, you can afford to take a little more risk than that...and get returns 2, 3 or even 4 times as much... do that for four, five or ten years and get conservative when you have some nice profit to " protect".
I'd suggest ( for a few years) something " international"...with Fidelity that could be FLATX...or FEMKX... or even a little conservative with FIGRX.
Check this website and use the calculator to see the difference over time of an investment getting 10% returns and one doing even slightly better 13% or 17%....
http://www.finishrich.com/free_resources...
(...and remember that 9.7% was as " aggressive" as FFFHX is EVER going to be...so your average after 35 years is going to be closer to 6% ? 5% ? )
Those international funds have made over 25% per year in the last few years...they may not continue that, but they will continue to outpace conservative U.S. companies for quite a few years....take advantage...double your money in four years... not ten... use your bigger profits to diversify.... once a year...get a Kiplinger's mutual fund issue and take one weekend to make some moves...
If you've done some figuring on that calculator you can see what an ASTOUNDING difference a little thought can do for your future.
As far as your concern about fees/expense ratios...if some guy/gal or team can make make 45% for me ( FLATX) or even 28% ( FEMKX)... I'll gladly pay the 1.1% fee.
If you are somehow leery of anything international...look at some of the " energy" funds : FNARX, FSESX, FSENX...
...everyone whines about " Exxon Mobil making soooo much money, yadda yadda.." stop whining, let 'em do it for you... things are not going to change that fast...and as a matter of fact even U.S. Gov't studies are seeing oil supplies in short, short, short supply by 2010.
So...you can be a lump on a log , or you can take just a leeeetle bit of an interest in your future... ( think you might have a wife and kids some day?.... impress 'em ...don't live off them .)
Good luck....( sorry to get on the soapbox)

Compare the expenses of a portfolio you put together vs. the 2050. Chances may be that because Fidelity takes that extra step to rebalance for you, there may be a higher cost than if you put it together. Also because it sounds like you have to rebalance and manage another account anyway, why not put together yourself? You don't have to rebalance all that often, maybe once a year, no less frequent than 2-3 years.

congratulations on starting your retirement planning early. it is the best thing you can do for yourself. agree with prior post, compare expenses. the main thing is you don't want to rebalance your portfolio on your own these funds will do that for you.

The Freedom Fund 2050 will make life easier for you now.

Start doing it yourself once you get up to $50,000 +

Ideally, a great portfolio consists of Large Cap Funds, Mid Cap Funds, Small Cap Funds, Real Estate Stocks, Gold Stocks, International Large Cap/Mid/Small - Emerging Markets....

All of that is wrapped up in the Freedom Fund

You don't want to go picking out 10 different funds with a few thousand, I don't think.....that would be time consuming.

That's why they created the Freedom Fund, for situations just like this.......and you certainly will not have to worry hardly at all.

Good Luck!

i strongly suggest that you take the time to do your own investing and not rely on some hired set of managers with an arbitrary set of operating rules.

behind every set of investing decisions are assumptions and hypotheses. some of those likely aren't real good ideas -- for example, the notion implicit in FFFHX that you will retire in approximately 2050 at age 67.

I have news. "standard" retirement ages are a useless notion. you could easily "need" to retire earlier than that, or still be very productive at age 67 and not ready to retire. Current trends suggest age 75 might be a better guess.

another "standard" assumption relates to how long you'll live after you do retire. Those assumptions are unsafe and unreliable. The averages are becoming longer by about 1 years for every five that go by. But what if you're the lucky one who lives to be 103?

You do not want your money to run out when you're 97 and still looking at the younger ladies. being too physically old to work and poor at the same time is not a fun place to be.

new assumptions:

1. you'll not retire until you're ready
1b. that might be when you're 53 or 83.

2. you'll live forever.

3. inflation will occur forever.

4. you may not be living in the ideal place to invest your retirement assets -- not even close, in fact.


GL

I actually have a significant amount of knowledge on the Fidelity Funds, they are managed in exactly the same manner as the insititutional money Fidelity manages. They will make your life easier, they do all the dirty work for you, and they are managed by the same people who manage the professionals who run the wealthiest investors money. If you have would like a more detailed breakdown of the process please e-mail me. The fees on the Freedom Funds are very very low, they are no-loads, and charge no additional fees because they are rebalanced. As a matter of fact they are likely lower than if you invested in a variety of funds yourself.