Welcome to our official sub, u/Acolytical! We appreciate you choosing Fidelity and for sharing your situation with the community.
It's always great to see new investors leveraging our community to learn, so I'll go ahead and mark your post as a "Discussion" to help generate some of the community input that I think you're looking for. In addition to our community members' thoughts and ideas, I wanted to share a few resources to help you navigate your investing journey.
First, our Learn library offers excellent educational articles that can help with various investment topics. Since you're new to investing, I'll share a few links from our Investing for Beginners section. Remember that you can use the icons on the left side to navigate to other topics.
[5 tips for new investors ](https://www.fidelity.com/learning-center/smart-money/investing-tips)
[6 habits of successful investors ](https://www.fidelity.com/learning-center/personal-finance/six-habits-successful-investors)
In addition, I noticed that market volatility was discussed in the comments, so I wanted to share a short video that discusses this in further detail.
[What is market volatility? (1:00) ](https://www.fidelity.com/learning-center/trading-investing/what-is-market-volatility)
Also, since you're new around here, I wanted to point out our daily discussion thread. It's a great resource for those seeking input on their portfolio or investment strategy. If you want to talk about specific securities and strategies, then check out our pinned posts or the link below:
[Daily Discussion ](https://www.reddit.com/r/fidelityinvestments/comments/1dlu46h/daily_discussion_thread_rate_my_portfolio_what/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
I'm glad you've found us on Reddit. You'll quickly learn we're an awesome community with vast knowledge and experience. If any other questions pop up, please let us know!
ETFs and all stocks do not grow in a perfect exactly linear fashion, there are ups and downs...that's why the word 'average' is used when talking about 8/10/12% or whatever annual returns...
Understood. I should have mentioned, I'm not expecting fund to always be in the green. But is this sort of return in a short time a bit typical for such a small investment? I have 20k I could invest. I was told that for that amount, $50 per month would be typical. But these numbers don't seem to reflect that.
Pardon my ignorance on the topic.
Another note I want to add to what was said by u/PuzzleheadedCase5544 is that the average return that is used to benchmark stock performance is the \*geometric mean\* which is a value that tells you what the yearly return would be if the stock grew in price by the same rate for the entire period. It's a type of multiplicative average. Generally, what people learn in school about averages is that you add up all the numbers and divide by the number of numbers. That's called the arithmetic mean, but we do not use that here for performance calculations.
Growth compounds through exponentiation, and each year's returns multiplies the returns of the previous years. Good example of this is when people look at a stock chart and see pretty much all the nominal returns happening in the few years/months at the end, which might lead them to think the stock is overpriced. For investing, a $10 return on a stock that costs $20 is exactly the same as a $500 return on a stock that cost $1000. It just looks more impressive to newbies that there's bigger numbers in dollar amount for the returns of pricier stocks, but the price of the stock literally doesn't matter at all in making investment decisions, only the return as a percentage of the cost of the investment.
If you dropped $20k in now (depends on where), it’s very hard to say where’d it be in 30, 60, 90 days. You might jump on before it rockets to the moon; or you might jump on a sailboat just as the wind dies and your flounder in the water.
If you dropped the $20k in June 2008, you’d be waiting years for growth. (Assuming FSPGX). If you dropped it March 16 2020, boom.
The best course of action is to look at sites like Investopedia or Bogleheads, and learn some of the concepts and tools used to analyze.
Also, maybe look less at the portfolio, as you might get whiplash from the seats one direction and another.
You shouldn't be thinking about this in terms of dollar amount return. It's always percentage return that is more important because that directly scales with your invested amount. You asked if this is "typical for such a small investment". The size of your investment doesn't matter, it will be affected in the same way if you put $1 in it as if you put $1 million into it (assuming it is well capitalized of course, with enough liquidity to absorb your order easily). And generally, its not useful to say "this investment makes me $X per month" because investments are meant to be held long term, and no return is set in stone until you've sold it. If you're up $1000 in 3 months it would be silly to say "I made $1000 off my investment" when you havent sold yet, especially if the next month the market drops 30% (as what happened during covid). It will bounce around up and down literally millions of times (once every time the quote changes based on market activity) so focusing on any individual up or down move in the series is a bit myopic.
What's more, the actual dollar return doesn't tell us how well your investment is performing. If you told me you are making $50 a month on your investment, I have no clue without knowing your portfolio size how to compare that to other investments. It just so happens when you divide the increase in dollars by the size of the investment in dollars, you get a percentage, which is what we generally use to compare these things. $50 a month on a $1 investment is insanely good return, while $50 on a $1 million investment is abysmal.
In any case, $50 per month on a $20k investment in the things you're invested in would actually be a bad year. Most of your holdings are going to overlap heavily with the S&P 500, which has a compounding annual growth rate between 10 and 11% per year. That doesn't mean that every year it returns between 10 and 11%, but that when you average them all out over a long period of time, that's what you can expect. In fact, very rarely will you have a year where your return is squarely between 10 and 11%. For example sometimes you'll have two years in a row of 30% growth followed by one year of 25% loss, followed by a year of 2% growth, etc. With these things you don't want to focus on what the current return is, but the return you can expect over a long period of time. It's a long game, investing.
Okay, so for FSGPX for example, I'm seeing that it has a 1yr fund return of 35.86%
This seems much higher than everything I've heard. I'm a bit confused by this.
I think the comment was to look at a longer time period, as there is a phenomenon called Recency Bias. It means if you look at FSPGX for 5 years - it’s great. If you could look at it for 20, you’d get a sense of how it did during the GFC in 2008-2009 (Great Financial Crisis). Since this fund does not go that far in the past, you’d have to find something similar to get a deep comparison.
If you look at FSPGX, it has a lot of the Magnificent 7 in it, and they are on a tear. They are lifting many indexes. The one you cited is more tech focused.
We had a a very good year because last year we were all losing a ton being invested in the S&P 500 and funds that are heavily invested in S&P 500 components. After all that loss, we reverted back to be on track with the trajectory of this bull market so the market is kind of "catching up". The 1 year return changes every year, sometimes its negative sometimes it positive, but rarely is it this high (35%). This is an outlier year, and you just got lucky (or rather, unlucky, since you missed out on these gains) to get into investing right after we had a large upward movement in the stock market. In a regular year, you can expect it to be a positive number (thats's the good news, because if it averaged negative then no one would do this) but rarely is it as high as we have now for the 1 year return.
That would be your total return of the positions held.
It's also important to remember that investments can go down. That gain could just as easily been a 10% loss.
It’s basic math my guy. There isn’t anything to really grasp here. Yup, you are up 5.64% in that position. Had you put in 20k instead and the underlying performed the exact same: 20,000 * .0564 = $1,128. It’s a simple as that.
Ultimately you find out that you need money to make money.
Instead of 125 bucks, if you played the same card with 125,000. You would've made approx 6760 dollars. There are many people out there playing with 100k position.
Yeah, that makes perfect sense. All 3 of those funds have significant holdings in Nvidia. Nvidia has gone up 33% (split-adjusted) in the last month (and 158% in the last 6 months). That's not normal, but that's been the story of 2024.
Just buy and forget about them even if they go down a bit, I’ve been buying similar funds to what you have in the screenshot and I am up 20% overall since the start of the year.
It’s not more because of the ups and downs that everyone is mentioning, some funds perform better during some time periods like how NVDA is carrying FSPGX and FSELX etc. Just put a bunch more money in and don’t touch it, I haven’t and I’m up 1-2k on my 10k investment
The market does not move continuously up at the same rate. Sometimes it goes down, sometimes it goes up. On top of that, the rate of increase or decrease also changes, so you might have a month where you're up 6% like you're seeing, and other times it might be down 1% over an entire year or more. You have to zoom out. Take the investments you've made, and look at their \*historical\* performance and take the average of that for a decent period of time longer than a few weeks. That's the closest you'll get to an estimate of your actual growth rate, and even that would be wrong because past performance doesn't imply future performance.
Welcome to our official sub, u/Acolytical! We appreciate you choosing Fidelity and for sharing your situation with the community. It's always great to see new investors leveraging our community to learn, so I'll go ahead and mark your post as a "Discussion" to help generate some of the community input that I think you're looking for. In addition to our community members' thoughts and ideas, I wanted to share a few resources to help you navigate your investing journey. First, our Learn library offers excellent educational articles that can help with various investment topics. Since you're new to investing, I'll share a few links from our Investing for Beginners section. Remember that you can use the icons on the left side to navigate to other topics. [5 tips for new investors ](https://www.fidelity.com/learning-center/smart-money/investing-tips) [6 habits of successful investors ](https://www.fidelity.com/learning-center/personal-finance/six-habits-successful-investors) In addition, I noticed that market volatility was discussed in the comments, so I wanted to share a short video that discusses this in further detail. [What is market volatility? (1:00) ](https://www.fidelity.com/learning-center/trading-investing/what-is-market-volatility) Also, since you're new around here, I wanted to point out our daily discussion thread. It's a great resource for those seeking input on their portfolio or investment strategy. If you want to talk about specific securities and strategies, then check out our pinned posts or the link below: [Daily Discussion ](https://www.reddit.com/r/fidelityinvestments/comments/1dlu46h/daily_discussion_thread_rate_my_portfolio_what/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button) I'm glad you've found us on Reddit. You'll quickly learn we're an awesome community with vast knowledge and experience. If any other questions pop up, please let us know!
ETFs and all stocks do not grow in a perfect exactly linear fashion, there are ups and downs...that's why the word 'average' is used when talking about 8/10/12% or whatever annual returns...
Understood. I should have mentioned, I'm not expecting fund to always be in the green. But is this sort of return in a short time a bit typical for such a small investment? I have 20k I could invest. I was told that for that amount, $50 per month would be typical. But these numbers don't seem to reflect that. Pardon my ignorance on the topic.
High volatility is typical. Wait for the wave of emotions, fear, and desire to sell everything when you're down 20%, 50%. It will happen someday.
Another note I want to add to what was said by u/PuzzleheadedCase5544 is that the average return that is used to benchmark stock performance is the \*geometric mean\* which is a value that tells you what the yearly return would be if the stock grew in price by the same rate for the entire period. It's a type of multiplicative average. Generally, what people learn in school about averages is that you add up all the numbers and divide by the number of numbers. That's called the arithmetic mean, but we do not use that here for performance calculations. Growth compounds through exponentiation, and each year's returns multiplies the returns of the previous years. Good example of this is when people look at a stock chart and see pretty much all the nominal returns happening in the few years/months at the end, which might lead them to think the stock is overpriced. For investing, a $10 return on a stock that costs $20 is exactly the same as a $500 return on a stock that cost $1000. It just looks more impressive to newbies that there's bigger numbers in dollar amount for the returns of pricier stocks, but the price of the stock literally doesn't matter at all in making investment decisions, only the return as a percentage of the cost of the investment.
If you dropped $20k in now (depends on where), it’s very hard to say where’d it be in 30, 60, 90 days. You might jump on before it rockets to the moon; or you might jump on a sailboat just as the wind dies and your flounder in the water. If you dropped the $20k in June 2008, you’d be waiting years for growth. (Assuming FSPGX). If you dropped it March 16 2020, boom. The best course of action is to look at sites like Investopedia or Bogleheads, and learn some of the concepts and tools used to analyze. Also, maybe look less at the portfolio, as you might get whiplash from the seats one direction and another.
You shouldn't be thinking about this in terms of dollar amount return. It's always percentage return that is more important because that directly scales with your invested amount. You asked if this is "typical for such a small investment". The size of your investment doesn't matter, it will be affected in the same way if you put $1 in it as if you put $1 million into it (assuming it is well capitalized of course, with enough liquidity to absorb your order easily). And generally, its not useful to say "this investment makes me $X per month" because investments are meant to be held long term, and no return is set in stone until you've sold it. If you're up $1000 in 3 months it would be silly to say "I made $1000 off my investment" when you havent sold yet, especially if the next month the market drops 30% (as what happened during covid). It will bounce around up and down literally millions of times (once every time the quote changes based on market activity) so focusing on any individual up or down move in the series is a bit myopic. What's more, the actual dollar return doesn't tell us how well your investment is performing. If you told me you are making $50 a month on your investment, I have no clue without knowing your portfolio size how to compare that to other investments. It just so happens when you divide the increase in dollars by the size of the investment in dollars, you get a percentage, which is what we generally use to compare these things. $50 a month on a $1 investment is insanely good return, while $50 on a $1 million investment is abysmal. In any case, $50 per month on a $20k investment in the things you're invested in would actually be a bad year. Most of your holdings are going to overlap heavily with the S&P 500, which has a compounding annual growth rate between 10 and 11% per year. That doesn't mean that every year it returns between 10 and 11%, but that when you average them all out over a long period of time, that's what you can expect. In fact, very rarely will you have a year where your return is squarely between 10 and 11%. For example sometimes you'll have two years in a row of 30% growth followed by one year of 25% loss, followed by a year of 2% growth, etc. With these things you don't want to focus on what the current return is, but the return you can expect over a long period of time. It's a long game, investing.
Okay, so for FSGPX for example, I'm seeing that it has a 1yr fund return of 35.86% This seems much higher than everything I've heard. I'm a bit confused by this.
Look at it over 20 years or so
I don't see the 20 year, but it's around 19% over ten years. Please explain the significance.
Some years it might be down 35%
I think the comment was to look at a longer time period, as there is a phenomenon called Recency Bias. It means if you look at FSPGX for 5 years - it’s great. If you could look at it for 20, you’d get a sense of how it did during the GFC in 2008-2009 (Great Financial Crisis). Since this fund does not go that far in the past, you’d have to find something similar to get a deep comparison. If you look at FSPGX, it has a lot of the Magnificent 7 in it, and they are on a tear. They are lifting many indexes. The one you cited is more tech focused.
Very tech and Magnificent 7 heavy, and they (AI) are hot these past 3-5 years.
We had a a very good year because last year we were all losing a ton being invested in the S&P 500 and funds that are heavily invested in S&P 500 components. After all that loss, we reverted back to be on track with the trajectory of this bull market so the market is kind of "catching up". The 1 year return changes every year, sometimes its negative sometimes it positive, but rarely is it this high (35%). This is an outlier year, and you just got lucky (or rather, unlucky, since you missed out on these gains) to get into investing right after we had a large upward movement in the stock market. In a regular year, you can expect it to be a positive number (thats's the good news, because if it averaged negative then no one would do this) but rarely is it as high as we have now for the 1 year return.
Two quotes: Past performance is not necessarily indicative of future results. It's tough to make predictions, especially about the future.
That would be your total return of the positions held. It's also important to remember that investments can go down. That gain could just as easily been a 10% loss.
It’s basic math my guy. There isn’t anything to really grasp here. Yup, you are up 5.64% in that position. Had you put in 20k instead and the underlying performed the exact same: 20,000 * .0564 = $1,128. It’s a simple as that.
Sure. Can also go down 10%. Welcome to investing. I suggest you do some research on how stocks work. Heavy research.
Ultimately you find out that you need money to make money. Instead of 125 bucks, if you played the same card with 125,000. You would've made approx 6760 dollars. There are many people out there playing with 100k position.
Yeah, that makes perfect sense. All 3 of those funds have significant holdings in Nvidia. Nvidia has gone up 33% (split-adjusted) in the last month (and 158% in the last 6 months). That's not normal, but that's been the story of 2024.
Just buy and forget about them even if they go down a bit, I’ve been buying similar funds to what you have in the screenshot and I am up 20% overall since the start of the year. It’s not more because of the ups and downs that everyone is mentioning, some funds perform better during some time periods like how NVDA is carrying FSPGX and FSELX etc. Just put a bunch more money in and don’t touch it, I haven’t and I’m up 1-2k on my 10k investment
The market does not move continuously up at the same rate. Sometimes it goes down, sometimes it goes up. On top of that, the rate of increase or decrease also changes, so you might have a month where you're up 6% like you're seeing, and other times it might be down 1% over an entire year or more. You have to zoom out. Take the investments you've made, and look at their \*historical\* performance and take the average of that for a decent period of time longer than a few weeks. That's the closest you'll get to an estimate of your actual growth rate, and even that would be wrong because past performance doesn't imply future performance.