A Note on Fidelity's Freedom Funds
Fidelity's Freedom funds are designed for investors targeting specific retirement dates as opposed to style focuses (Growth or Income). The longer the targeted time period, the more equity exposure the fund has. As the target date becomes closer, the funds reduce their stock exposure and increase bond and cash equivalent holdings to lower the investor's risk of a loss.

The Freedom funds offer a passive approach to portfolio management that may appeal to some retirement plan participants. However, we believe the asset allocation decisions provided by these funds are crude at best. The Freedom Funds attempt to make a decision about an investor's asset mix based solely on age. An investor's financial goals (desire for gains) and tolerance for risk are other key factors that should ultimately determine investment strategy and asset allocation. Ideally, your wealth, desire for gains, risk tolerance, as well as your age and investment time horizon are all considered carefully when developing the proper asset allocation for your portfolio. Because of the "mechanical approach" to changing the asset allocations over time and the Freedom Funds' mediocre performance, we prefer an active approach to portfolio management.

Company Stock
As a general rule of diversification, no single stock should represent more than 10% of your total investment portfolio. We believe this is a good guideline for ownership of company stock in your 401(k). Most individual stocks are much more volatile than mutual funds. To the extent you invest more in your company's stock, your overall portfolio will exhibit more volatility (risk), and retirement investing is not about hitting home runs, but about consistently hitting singles and doubles.

That being said, many corporations often match a portion of employee retirement plan contributions with company stock, offer employees attractive incentives to purchase company stock either within or outside of retirement accounts, or include stock or stock options as part of employee compensation. We recommend that employees take full advantage of these opportunities, but remember to keep their total company stockholdings within reasonable levels.