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I'm trying out a feature Fidelity offers for $60/year, called "basket portfolios."

For MI investing, the benefit is that a basket of stocks can be purchased with defined percentages (of an overall basket buy-amount) for each position, and rebalanced periodically, with positions added and deleted, and holdings adjusted (bought or sold) up or down as necessary to bring the weights back to the original plan.

So if a position becomes over-weighted due to higher gains than the others, they are all brought back into the balance of weights you prescribe (which can be changed, or not, from the original weighting.) Or vice versa.

I see this as an easy way to keep tabs on how your strategies are doing, because each basket can be isolated, named for the MI screen you're using for that basket, and seen as a single line representing 5 or 10 or however many positions deep you are in a screen. Also, it is a way to simplify the rebalancing process.

The cost isn't material to my portfolio, as it stands now.

I haven't named any of them "the basket of deplorables," but I've been tempted, on a bad day for the market.

I tried Fidelity's basket feature. It was OK but buggy. I stopped after a few months.

I'm trying out a feature Fidelity offers for $60/year, called "basket portfolios."

Oh, wow!

I was going to say that you can do the same thing at M1 Finance for free. But M1 limits you to 1 IRA and 1 Roth and 5 taxable accounts. An account can have more than one "pie" (like FIDO "basket"), but all the holdings in a account are lumped together in the portfolio download, regardless of which pie they are in. A real PITA.
M1 only trades in the twice a day window, FIDO Baskets trade immediately. Both are, of course, only market orders.

Not $60/yr, but $5/mo. I thought it was $5 per basket but it's $5 for as many baskets as you want. Per account. I guess that would mean $5 for each account? That would be $15/mo for taxable and IRA and Roth.
Ooh, no. Looks like the enrollment is per login, not per account. Even better.

Thanks.

Yes, the charge is $4.99 per month, per customer, with unlimited accounts and unlimited baskets in each account.

For me, I'm using it for only one account (an IRA), and currently running 3 baskets, each basket using one MI screen, about 25 positions altogether.

My taxable accounts would probably generate more tax liability than I would like to have if I used MI strategies, so they're broad-based, buy-and-hold investments. For example, VV (Vanguard Large-Cap), which has a 20 year (June 2006 to June 2026), 10.5% CAGR with no trades by me, just by the fund. I suspect that taxes would reduce that quite a bit more, if there were MI-style trading involved. So I plan to "hold-till-dead." Then my heirs get it with stepped-up cost basis.

they eliminated this a while ago; how long has it been back?

Dog, I tried that feature (again) a couple of years ago and, while close to being great, it just breaks down for me because,

you can't enter "staged" trades over the weekend or overnight for Fidelity's automatic execution the next morning or at a specific time (i.e. the way the old Folio website did it). You must enter the basket during trading hours and pull the trigger.

It used to be free, also - now they've made minor upgrades to it and started charging for it. Short $, but the principle of it.

If they've since improved it with the ability to set up and save a new basket outside of trading hours I would try it again.

FC

The FAQ doesn't say anything about having to edit/save a basket only during trading hours.

It mentions a thing called draft bucket:
"After you build your basket, select "Save draft," and the securities that you've picked and their target weights will be saved for you to buy now or later."

"Visit your personalized basket dashboard where you will see all your baskets and draft baskets. View an individual draft basket, edit, or delete, or even build a new one."

"How do I trade a draft basket?
Visit your basket dashboard and select "Edit and Buy" for the draft you want to trade, ensure the securities have target weights that total 100%, and select Continue. You're now set to finish building your basket, edit your draft if you'd like, and trade it during market hours."

It looks like a draft bucket is equivalent to an M1 pie. It doesn't actually trade until you connect it to an account, whereupon it does the trades.

I have a number of detailed questions about how it all works, which are not addressed in the FAQ.
I guess you have to sign up for baskets to see how these work.


I am amused about people choking on the $5/mo fee. Up until recently we were paying $5-$20 commission per trade. Datek was $9.99 per trade. BrownCo was $7 or $12 for limit orders.

FC “If they've since improved it with the ability to set up and save a new basket outside of trading hours I would try it again.”

Yes you can set up a basket ahead of time outside of trading hours. Fidelity allows you to create, edit, and save baskets as drafts while the market is closed.
https://www.fidelity.com/direct-indexing/customize...

I’ve also been looking at using basket orders. Fidelity evidently has been improving the basket features. The unanswered question for me is how efficient (slippage) the trades would be for a frequently traded screen. One post said they use market orders which Fidelity is pretty efficient for ETFs and Large Caps but not for lightly traded equities. I tried searching some websites for user posts mentioning their results but couldn’t find any.
Might be best to try using the basket for most trades to minimize the task but set aside orders with % of MDDV > 5% and manually use VWAP, > 10% use VWAP over 2 days.

The unanswered question for me is how efficient (slippage) the trades would be for a frequently traded screen. One post said they use market orders which Fidelity is pretty efficient for ETFs and Large Caps but not for lightly traded equities.

I just checked the bid/ask spread for a handful of the recently picked 52 week momentum Nasdaq 100 stocks, while the market is open. None of these are thinly traded.
Can't speak for stocks in any of the other myriad MI screens.

AMD       0.03%
INTC      0.03%
KLAC      0.11%
LRCX      0.14%
MU        0.08%
SNDK      0.09%
STX       0.24%
WDC       0.13%

Very small slippage, so market orders should be fine.

Also, if you edit the basket at night the trades will be market orders at the next open, therefore no slippage.

Also, if you edit the basket at night the trades will be market orders at the next open, therefore no slippage.

Not sure thats possible. Been using the Fidelity "Baskets" for about a year I guess.

I just edit and save a basket on sunday then trade in two steps on monday.

Sell drop outs first then Buy replacements with specific amounts. Only select and rebalance to take some profits off the table.

Works for me.

GD_

Yes you can, No you can’t set up a basket trade ahead of time for trade at the open!

mapg’s first had experience is correct!

I read the Fidelity frequently asked questions and then asked AI to verify you can set up trades ahead of time.
AI said you can what AI didn’t say is to actually execute the trade you have to wait for the market to be open.

Specifically I found “Once the market opens, you can execute the entire saved basket with a single click.”

I just edit and save a basket on sunday then trade in two steps on monday.
Sell drop outs first then Buy replacements with specific amounts.

Huh? How is that any different than just doing the sells and buys in a non-basket account?

I've been using pie's at M1 for almost 6 years. The convenient thing is being able to edit the pie on Sunday and letting them handle all the sells and buys.

Running the same screen at Merrill and Etrade is a PITA. I have to first do all the sells, then calculate how much to buy of each of the new picks, then buy each one while keeping track of the remaining buying power so I don't overbuy the last one.
Trying to do limit orders, especially on the sells, is often tricky. You can't do the buys until the sells fill, and sometimes the stock runs away from you and you have to keep adjusting the limit until it finally does fill.
Rebalancing all holdings would be a real PITA to do manually.

Gah, I'm talking myself into trying FIDO baskets.

I read complaints from 1-2 years ago that an IRA FIDO basket would sometimes try to do the buys before the sells, with obvious hilarity.

No you can’t set up a basket trade ahead of time for trade at the open!

::sigh:: The FAQ goes into great detail on dumb things I don't have any interest in doing. Like "Once the market opens, you can execute the entire saved basket with a single click.”

It doesn't have an answer to this simple thing that us people trading monthly MI screens want to do. When the market is closed, I want the trades to take place automatically when the market next opens. Why is this so difficult to answer???

Of course, being able to edit your basket and then being able to decide in real-time when the submit the trades could be handy. At M1 you can't. M1 does the trades in 2 daily windows.


So I contacted FIDO customer service online chat and this is how it went.

Me: If I edit a basket portfolio on Sunday, can it execute the trades on Monday without me having to do anything more? When I am not able to login on Monday.

Amy: "If you enter a trade on Sunday for a market order, it will execute on Monday when the market opens. The same goes for trading in baskets here."

Me: As long I can edit the basket on Sunday and then not log in for several days and then log in and see the trades were executed on Monday. That's all I want.

Amy: Yes you can!


So I can set up a dummy basket overnight and see what happens in the morning. Will report back after I know.

I just edit and save a basket on sunday then trade in two steps on monday.
Sell drop outs first then Buy replacements with specific amounts.

Huh? How is that any different than just doing the sells and buys in a non-basket account?

Your right not a lot of difference.
Except it allows partial shares and control of dollar amounts instead of shares.
The multiple baskets also allow a way to schedule trades as a group.
Run three baskets(five each) for one screen(top15) and update one of three every 28 days.

GD_

Have not done it for a while, but at Interactive Brokers you can use basket trader to enter orders for execution at any time.
You can set order attributes and one of them is execution time.
Using that method you can simulate FolioFN trading windows.

Me: As long I can edit the basket on Sunday and then not log in for several days and then log in and see the trades were executed on Monday. That's all I want.
Amy: Yes you can!


Amy of FIDO customer service online chat ... lied.
But is it a lie if you believe it?

Okay, Amy was WRONG. Confident. And wrong.

You can edit the basket, but you CANNOT get it to trade automatically. Nor can you tell it to do any trades when the market is closed. If the market is closed, the buttons for trading are not there. All you can do is edit.

The available trade buttons are: Buy, Sell, and Rebalance.

What you'd want to do for a typical MI screen is remove some stocks and add the same number of stocks. Then sell the removed stocks and buy the new stocks in equal dollar amounts, while leaving the carried-over stocks untouched, neither bought nor sold.

You can't do that. Best you can do it edit the weight of the carried-over stocks to be their current weight and then set the new stocks equal weight to make up 100%.
Then wait until the market opens and click REBALANCE.

No guarantee that when the market opens that the carried-over stocks will be at the same weight that they were when you reset all the weights. So those may get a partial sell or buy.

Conclusion: FIDO basket is essentially useless for the typical MI portfolio.

M1 "pies" do everything you'd want.

The available trade buttons are: Buy, Sell, and Rebalance.

Me thinks you are making it seem harder than it is.

Allocate a fixed amount per stock with enough for float of cash.

For starters avoid the REBALANCE trade button.

Assume a fixed 5 stock "basket"

First edit by adding the new replacements to the "basket". No trade yet
The new stocks will show in the "basket" as zero $ amount.

When the market is open Select and "SELL" each Old stocks with the all selection.
With the cash funds available "Buy" in equal amounts to each NEW stock.

THe "Basket" will now show those not sold, those bought and those sold as zero $ amount.

The next time you edit then clean up those with zero amounts or not.

GD_

First edit by adding the new replacements to the "basket". No trade yet
The new stocks will show in the "basket" as zero $ amount.

When the market is open Select and "SELL" each Old stocks with the all selection.
With the cash funds available "Buy" in equal amounts to each NEW stock.


Yeah, but...

That's exactly the steps you would take to do it in a regular non-basket account.

Sell the old stocks.
Figure out how much of each new stock to buy.
You tell it dollar amount to buy.
Now the actual weights have no bearing on the "target weights". The target weights have nothing to do with anything until you rebalance.

How is baskets no any different than a non-basket account?
Oh, it is a one-click to buy or sell multiple stocks.
Market orders only.
Which can only be submitted when the market is open.

Not worth $5/mo for running monthly MI-type screens.
Not even worth it if it was free.
Same work on your part but also comes with more restrictions.

Too bad, I was hoping it made sense to move an account from M1-Finance to FIDO.

What we as mechanical investors need is an optimal stock switching strategy. We have a screen which is stock rating system that each period has determined that there are N held stocks that are less likely to outperform than N new stocks. The algorithm should optimally create a set of sell then buy orders that accomplish this with a minimum slippage. I can’t believe that the brokerages that have this same problem in their internal mutual funds management. Pairs trading sometimes use a rule based on the available shares at a spread and the z-score. I asked Claude for advice on this problem and this was part of the reply:

This is a well-studied problem that touches several areas of quantitative finance. Here's the landscape:
The Core Problem
You're solving a portfolio transition optimization problem — minimizing cost (market impact, spread, timing risk) while moving from portfolio A to portfolio B.

Multi-Leg Execution Algorithms
Brokers and execution systems (e.g., ITG, Virtu, Bloomberg EMSX) solve this as a constrained optimization:
minimize: Σ spread_cost_i + Σ market_impact_i + timing_risk
subject to:
- available_quantity_i at each price level (LOB depth)
- cash-neutrality or delta-neutrality constraints
- position limits
- correlated execution timing across legs
Cross-Impact & Correlation Effects
The hard part for N > 2 is cross-asset market impact — selling stock A moves the price of correlated stock B before you buy it. Research papers by:
• Mastromatteo et al. on cross-impact
• Schneider & Lillo — "Cross-impact and no-dynamic-arbitrage"
These show that naive leg-by-leg execution is suboptimal; you need to jointly optimize the execution schedule.

>>> The point is that all the major brokers know about this problem and most likely are already using internal algorithms for this. And this type of portfolio exchange isn’t just used by mechanical investors. Or perhaps they don’t want to offer a black box system that obviously like any system like this make some poor trades.

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