How to Pick Your First Fidelity Index Funds
For First-time investors opening a Fidelity account · Based on Scribner Fidelity Index Fund Selection Framework
// TL;DR
If you're opening your first Fidelity account, this framework shows you how to skip 98% of Fidelity's 300+ funds and start with just one or two. Beginners usually pick FXAIX (S&P 500) as their core equity fund and FXNAX (bonds) for stability, sized with the 120 Rule: 120 minus your age equals your stock percentage. You don't need international or tech funds to start. This gives you a diversified, low-cost portfolio (0.015% expense ratio) you can set up in minutes and recalibrate every five years.
Which Fidelity index fund should a beginner buy first?
For most first-time investors, the answer is FXAIX, the Fidelity 500 Index Fund. It tracks the S&P 500—roughly 500 of the largest US companies—carries a rock-bottom 0.015% expense ratio, and sits at the top of most investors' lists. Out of Fidelity's 300+ in-house index funds, only five matter (the 5 Funds Rule): FXAIX, FSKAX, FSPSX, FSPTX, and FXNAX. As a beginner, you can safely ignore the other 295+ and start with FXAIX as your core.
If you're torn between FXAIX and FSKAX (the Total Market fund covering 3,700+ companies), don't agonize. Both have identical 0.015% expense ratios and have become highly correlated because large companies drive most market returns. There's no wrong answer—default to FXAIX and stay consistent.
How much should I put in stocks vs bonds as a beginner?
Use the 120 Rule: subtract your age from 120 to get your stock percentage; the rest goes into bonds. A 28-year-old holds 92% stocks and 8% bonds. For the bond sleeve, use FXNAX (Fidelity US Bond Index Fund, 0.025% expense ratio), which protects your portfolio and generates income through its ~4.4% 30-day yield rather than growth.
A classic beginner example: a 28-year-old salaried professional with moderate risk tolerance and no strong tech opinion puts 92% in FXAIX and 8% in FXNAX, skips international and tech funds entirely, and recalibrates at age 33. That's a complete, diversified portfolio in two funds.
Do I need international or tech funds when starting out?
No—keep it simple at first. FSPSX (international) is for reducing US mega-cap tech concentration, and FSPTX (Select Technology) is a high-risk, actively managed satellite for investors explicitly bullish on AI. Neither is necessary for a starter portfolio. You can always add FSPSX later if you decide you want less reliance on US tech, or a small FSPTX position if you're convinced about the AI buildout. Starting with a clean 2-fund portfolio removes decision paralysis.
How do I actually buy the fund inside Fidelity?
Once your account is funded, go to Trade, search by ticker (like FXAIX) or fund name, enter a dollar amount (minimum $1), click Preview, then Place Order. One thing that surprises beginners: index mutual funds don't execute in real time. All orders settle at end-of-day NAV pricing, so you won't see your confirmed price until after market close. Check your holdings anytime under the Positions tab.
What should I expect after I invest?
Expect a low-maintenance, diversified portfolio—but not a smooth ride. The historical average annual return does not show up every year. Most years are much higher or lower than the average, and negative years are normal and expected. Don't panic-sell during a downturn if your time horizon is long. Also know that even a broad fund like FXAIX is roughly 39% concentrated in the top 10 tech holdings due to market value weighting, so your "boring index fund" is more tech-heavy than it sounds.
One more note: Fidelity also offers Zero Funds with 0% expense ratios if cost minimization is your top priority. Don't let this become a decision blocker—the standard funds are already extremely cheap.
Next step: Calculate your 120 Rule allocation (120 minus your age), open your Fidelity account, and place your first order in FXAIX and FXNAX. Set a calendar reminder to recalibrate in five years.
// FREQUENTLY ASKED QUESTIONS
What's the minimum amount I need to start investing in Fidelity index funds?
You can start with as little as $1 for Fidelity index mutual funds like FXAIX and FXNAX. This makes them extremely accessible for first-time investors. Simply go to Trade, search for the fund, enter your dollar amount, preview, and place the order. There's no need to buy whole shares like you would with some stocks.
Should a beginner choose FXAIX or a target-date fund?
FXAIX offers lower fees and transparency, while a target-date fund automates your stock-bond glide path for you at a higher cost. If you want a truly hands-off option, a target-date fund is fine. But if you're willing to apply the 120 Rule and recalibrate every five years, FXAIX plus FXNAX gives you more control at a cheaper 0.015% expense ratio.
How often should a beginner check their Fidelity portfolio?
Checking every five years to recalibrate your 120 Rule allocation is the main maintenance requirement—daily checking often leads to panic-selling during normal downturns. Since negative years are a normal part of investing, frequent monitoring can hurt more than help. Set your allocation, automate contributions if possible, and let it compound.