When COVID-19 hit, the whole world anxiously watched the pharmaceutical sector for a cure. And it came through, creating a vaccine in record time.

This success led to a new surge of investor interest, as 36% of investors expect to put more money in pharmaceutical stocks in 2021, according to the latest MagnifyMoney survey of nearly 1,000 investors. In addition, 57% of investors said the promise of a vaccine made them more likely to invest.

MagnifyMoney looked at this new interest from multiple angles, including the expectations, regrets and ethical concerns people had about pharmaceutical investments.

• Key findings
• More than 1 in 3 investors expect to increase pharmaceutical investments as COVID-19 vaccine spurs stock market gains
• Pharmaceutical investors, by the numbers
• More than 8 in 10 current pharmaceutical investors have made related investment amid coronavirus pandemic
• 1 in 10 investors think investing in pharmaceutical stocks is unethical, but they do it anyway
• 47% of investors regret not investing in pharmaceuticals stocks in the past
• Methodology

Key findings

• 36% of investors expect to invest more in pharmaceutical stocks in 2021, with 57% of investors saying the promise of a COVID-19 vaccine makes them more likely to do so.
• The vast majority (82%) of current pharmaceutical investors have purchased a related stock or increased their spend on a pharma investment amid the coronavirus pandemic. Of that group, 28% did so within the past month.
• 1 in 10 investors say they don’t think investing in pharmaceuticals is ethical but do so anyway. At the same time, nearly a third (31%) of investors who don’t currently invest in these stocks say it’s because they don’t trust big pharma.
• 47% of investors say they regret not investing in pharmaceutical stocks in the past. In fact, 59% of those with regrets say vaccine news would have increased their portfolio value had they invested in pharmaceutical stocks.

More than 1 in 3 investors expect to increase pharmaceutical investments as COVID-19 vaccine spurs stock market gains

As noted, our survey showed that 36% of respondents said they expect to invest more in pharmaceutical stocks in 2021:

Male investors (43%) seemed more interested in investing more in pharmaceutical stocks in 2021 than female investors (25%). Gen Xers (47%) led the way among the age groups, compared with:

• 40% of millennials
• 15% of baby boomers

Tendayi Kapfidze, LendingTree’s chief economist, believes there are good reasons to consider pharmaceutical stocks for investors looking to make money.

“Health care is one of the fastest-growing sectors of the U.S. economy,” Kapfidze said. “An aging population means that demand for health products, including pharmaceuticals, will continue to increase.”

Still, he acknowledged that pharmaceutical investing does have its downsides.

“The products are complex, which can be difficult for the average investor to analyze,” he said. “Drug development is also a risky process, as potential drugs have low odds of reaching the market.”

Pharmaceutical investing gets boost from vaccine development

Given the potential risks and downsides of pharmaceutical stocks, it makes sense that 20% of investors don’t expect to invest in pharma at all in 2021. However, given that 31% of investors didn’t have any pharmaceutical stocks in 2020, this is another sign that the promise of a COVID-19 vaccine increased interest.

Our survey data backs this up, as 57% of respondents said the vaccine made them more likely to invest — once again with a greater impact on male investors than female investors (62% versus 47%, respectively).

Some stocks working on vaccines have performed very well the past year, said Kapfidze, explaining the appeal. However, he cautioned that those gains may be already realized, so future investment earnings could depend on new innovations.

More than 8 in 10 current pharmaceutical investors have made related investment amid coronavirus pandemic

More than 8 in 10 (82%) investors have made some sort of pharmaceutical investment over the past nine months — amid the coronavirus crisis. Here’s how those numbers break down:

The constant news about COVID-19 and the vaccine rollout made an impact on investors. They seem to be tracking the news, as 28% made their most recent purchase within the past month — during the vaccine rollout — and another 27% made their most recent purchase more than a month ago but within the past three months, when the vaccines were getting close to launch.

Of interest:

• 85% of male investors made a pharma-related purchase or increased their spend over the past 9 months, versus 75% of female investors
• 31% of male investors made an investment within the past month, versus 23% of female investors
• 37% of investors earning $100,000-plus made an investment in the past month

Investors overall have been active, as 74% have reallocated their portfolio in some way over the past month. Of this group, 35% reallocated their portfolio to put more money in pharmaceutical investments — with men being more likely to invest more compared to women and Gen Xers and millennials being more likely to move into pharma than baby boomers.

1 in 10 investors think investing in pharmaceutical stocks is unethical, but they do it anyway

The majority of investors — nearly 60% — believe it’s ethical to invest in pharmaceutical stocks. Interestingly, another 10% said it’s unethical, but do it anyway:

Whether investing in pharmaceuticals is ethical is a topic of debate. After all, these companies can profit off life-saving discoveries. They can also end up putting shareholder returns above helping others, such as charging a high price for an essential medicine.

That’s why 12% of investors reported not putting their money in pharmaceutical stocks due to ethical concerns. Female investors (14%) were more likely than male investors (10%) to avoid pharma due to ethics.

Still, money talks, as another 10% of investors put money in pharmaceutical stocks even though they had issues. Millennial investors were the most likely of all generations to override their concerns, as 14% put money in pharmaceutical stocks despite seeing the industry as unethical.

In the end, 58% believe it’s ethical to invest in pharmaceutical stocks. Kapfidze also believes that the good outweighs the bad.

“Pharma advancements over the past 100 years have increased life expectancy significantly, and the industry is currently at the forefront of the response to the coronavirus,” he said.

When you invest in pharmaceutical stocks, you’re putting your money toward funding these innovations.

47% of investors regret not investing in pharmaceuticals stocks in the past

For investors sitting on the sidelines, it was tough watching the recent gains in pharmaceutical stocks. In fact, 47% of investors regret not investing in these stocks in the past:

Male investors (53%) were more likely to regret not investing in pharmaceutical stock than female investors (38%). This makes sense given that men were more involved with managing their investments, so they may be more aware of what they’ve missed. It would likely be even more frustrating for the 42% of investors who sold stock at the start of the pandemic, as nearly all regret doing so.

When asked why they regretted not investing in pharmaceutical stocks, the top reasons these investors gave were:

• The news of the vaccines would have increased the value of their portfolios should they have invested in those stocks (59%)
• They would have been able to benefit from longer-term gains (42%)
• Many people are buying these stocks now, so the price has gone up (13%)

Still, not all investors regret keeping their money out: Nearly a third who don’t invest in pharmaceutical stocks said it’s because they don’t trust big pharma.

Here are the rest of their reasons:

When it comes to not investing, female investors (52%) were more likely to not have a specific reason than male investors (39%).

Getting started with pharmaceutical stocks

Kapfidze’s main piece of advice for investors looking to get in on pharmaceutical stocks is to do so cautiously.

“Make sure your investments in pharma are part of a diversified portfolio in order to manage risk,” he said.

Even if you are optimistic about pharma’s potential, you should still make these investments only a part of your portfolio rather than the entire thing, so you don’t have all your eggs in one basket. After all, diversification is one of the most important strategies for trading stocks.

Another option is to invest through an ETF or mutual fund (used by 37% of investors). These funds take your money to buy a large portfolio of pharmaceutical stocks, managed by a professional investor. That way, they handle the research and picks for you.

Finally, consider meeting with a financial advisor before making trades and putting more money into pharmaceutical stocks. Given the high interest in this sector these days, it should be a topic they’re used to discussing.

Methodology

MagnifyMoney commissioned Qualtrics to conduct an online survey of 954 consumers with at least one investment account. The sample base was proportioned to represent the overall population, and all responses were reviewed by researchers to ensure quality control. The survey was fielded Dec. 17, 2020 through Dec. 21, 2020.

We defined generations as the following ages in 2020:

• Millennial: 24 to 39
• Generation X: 40 to 54
• Baby boomer: 55 to 74

The survey also included responses from Generation Z (ages 18 to 23) and the silent generation (75 and older). However, their responses weren’t included in the generational breakdowns due to low sample size among investors in those age groups.

The Fidelity Account is a low-cost brokerage account offered by Fidelity Investments that allows investors to trade U.S. stocks, exchange-traded funds (ETFs) and options online with $0 commission fees. Fractional share trading is also available through the Fidelity mobile app.

The account is a standout for its fee structure and range of investment choices. Broker-assisted trades are pricey, but otherwise, there are few downsides. This Fidelity review is designed to help you decide if it’s the right brokerage for you.

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on Fidelity’s secure website

The bottom line: Fidelity may appeal to beginning and more experienced investors alike with its diverse investment options and competitive pricing.

• Full-service broker with a strong brand reputation
• Extensive options for all investor types
• Low or no fees/commissions on most products

Minimum deposit	$0
Account types	Individual brokerage accounts Joint brokerage accounts Cash management accounts Fidelity accounts for business Rollover IRA Traditional IRA Roth IRA for kids Inherited IRA Inherited Roth IRA SEP IRA Self-employed 401(k) SIMPLE IRA Investment-only plans for business 401(k) plans for small business Managed accounts with Fidelity Go 529 college savings accounts Coverdell ESAs Health Savings Accounts ABLE accounts Trust accounts
Tradable securities	U.S. and international stocks ETFs from Fidelity, iShares and other industry leaders Options Fidelity Mutual funds and funds from other companies Bonds Certificates of deposit Precious metals
Fees	$0 commission fees for online U.S. stock, ETF and Options trades Additional fees apply for broker-assisted trades and purchases of transaction fee non-Fidelity funds No annual account fee
Sign-up bonus	None currently available

• What Fidelity offers and who it’s for
• Fidelity fees and costs
• Fidelity investing tools and research
• Fidelity user experience
• Fidelity investor education
• Fidelity security
• Alternatives to Fidelity to consider

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What Fidelity offers and who it’s for

Fidelity is a full-service online brokerage that offers an extensive range of investment Options, including stocks, Mutual funds, ETFs, Options and precious metals. Both beginning and more experienced investors may find Fidelity‘s low trading costs an attractive incentive for opening an individual or joint brokerage account. You also may choose to invest in an IRA or Solo (401)k through Fidelity to save for your retirement.

Fractional share trading is something else that sets Fidelity apart, as not all online brokerages offer this option. In terms of where Fidelity tends to fall short, cryptocurrency and futures trading aren’t included in the list of investment Options. And if you need a broker’s help to execute a trade, that means paying an added fee.

Pros

• Wide range of investment choices: Fidelity makes it relatively simple to build a diversified portfolio with its range of investment Options, which includes both Fidelity and non-Fidelity funds.
• Low-cost trading: Like a number of online brokerages, Fidelity has adopted a $0 commission fee model for online trades of U.S. stocks, ETFs and Options.
• No account minimum: While some brokerages require a larger minimum deposit to open an account, Fidelity allows you to get started with a $0 minimum.
• Extensive research tools: Fidelity is generous when it comes to providing investors with the research and analytical tools they need to make investment decisions.

Cons

• Broker-assisted trades will cost you: Getting broker assistance in executing a trade will require paying an additional fee.
• No crypto or futures: Investors who are interested in trading cryptocurrency  or futures will need to look elsewhere.
• High mutual fund fees: Investing in non-Fidelity funds could trigger a steep trading fee.
• Holding period for initial withdrawals: While you can open and fund an account with Fidelity online in minutes, it can take up to 10 business days to verify banking information for withdrawals from your account.

Fidelity fees and costs

Option trading fees	$0 + $0.65 per contract for online trades; $12.95 + $0.65 per contract for FAST trades (by phone); $32.95 + $0.65 per contract for broker-assisted trades
Stock trading fees	$0 for online trades of U.S. stocks; $12.95 for FAST trades (by phone); $32.95 for broker-assisted trades
ETF trading fees	$0 for online trades of U.S. stocks; $12.95 for FAST trades (by phone); $32.95 for broker-assisted trades
Mutual fund trading fees	$0 for Fidelity funds; $0 on purchase and $49.95 on redemption for no transaction fee non-Fidelity funds held less than 60 days; $49.95 per purchase and $0 at redemption for transaction fee non-Fidelity funds
Bond and CD trading fees	$0 for new issues, $1 per bond for secondary issues; $0 for online U.S. Treasury auctions and secondary issues; $19.95 for representative-assisted U.S. Treasury auctions and secondary issues
Account fees (annual, transfer, inactivity)	No annual fee, no transfer fees and no inactivity fees; only additional fees may be: Up to 3% of principal for foreign exchange wire transfers $50 Depository Foreign Trust Company foreign settlement fee $100 stock certificate transfer fee 1% of principal foreign dividends and reorganization transaction fee $32.95 per margin liquidation

Fidelity has followed the example of other online brokerages and moved toward commission-free trading for U.S. stocks, ETFs and  Options when trading online. You can also trade Fidelity‘s impressive collection of Mutual funds with $0 commission fees.

You will, however, run into fees if you want to trade non-Fidelity funds. Again, you’ll pay $0 on purchase for no transaction fee funds from issuers other than Fidelity and $49.95 at redemption for funds held less than 60 days. Transaction fee non-Fidelity funds require a $49.95 fee per purchase but charge $0 on redemption.

Fidelity investing tools and research

• Online trading tools
• Mobile trading tools
• Active Trader Pro

Online trading tools

Fidelity‘s online trading platform includes monitoring tools to help investors:

• Track stock price movements and profit/loss positions in real time
• Research specific market sectors
• Execute trades
• Research individual securities
• Read the latest market news
• Chart their comprehensive financial picture

Investors have access to an ETF screener that allows them to compare more than 2,000 commission-free ETFs, along with mutual fund, stock and bond screeners. Fidelity aggregates investment news and reports from a variety of well-known sources, including Reuters, Zacks Investment Research and Argus Analyst.

Mobile trading tools

The Fidelity mobile app allows investors to track their portfolio on the go. The app, which is free to download for iPhone and Android, makes it easy to:

• Manage your portfolio and watch lists
• Execute trades
• Invest with fractional shares
• View balances and get real-time quotes
• Set up account alerts and notifications
• Save articles and take notes

The most notable feature of the Fidelity mobile app is the ability to trade fractional shares. Through fractional share investing, you can purchase more expensive stocks in smaller increments. With dollar-based investing from Fidelity, you can trade shares of more than 7,000 U.S. stocks and ETFs for as little as $1. That could be appealing to newer investors who are just getting started and don’t have a lot of money to put into the market.

Active Trader Pro

Active Trader Pro is Fidelity‘s dynamic online trading platform. To use Active Trader Pro, you have to request access through Fidelity. You may access this feature automatically if you trade 36 times or more in a rolling 12-month period. If you’re approved for Active Trader Pro, it’s free to use.

Once you download Active Trader Pro for PC or Mac, you’ll have access to tools and research that allow you to take an even deeper dive into trading. For example, the Trade Armor feature allows you to visualize risk and reward for a particular investment while tracking price movements. Real-time analytics make it easy to track technical indicators for stocks to identify trading opportunities.

As the name suggests, Active Trader Pro is designed for investors who take a more active approach to portfolio management. While it’s accessible for active Fidelity investors of any skill level, it may be a little overwhelming for a beginner.

Fidelity user experience

Between online and mobile investing, Fidelity makes investor accounts easily accessible. If you’re unfamiliar with the Fidelity website and its layout, however, you could get lost when moving between different pages. The mobile app, on the other hand, is easier to navigate as you move through different screens and tabs.

In terms of customer service, Fidelity offers support by phone, live chat and secure messaging. Phone support is available 24/7 by calling 800-343-3548. You can also use live chat to connect with Fidelity Support, but it may take time to be connected to a representative. During one attempt, we were put in the queue at number 24 in line.

We also called customer support, which responded promptly with a hold time of less than a minute. Likely, this will all depend on the volume of calls at the time of your attempt. The customer service representative we spoke with on the phone was knowledgeable and able to answer all of our questions, which included requesting information on minimum deposits and how to withdraw money from a brokerage account.

Fidelity investor education

The Fidelity Learning Center offers numerous educational resources to help investors shape their portfolio strategy. The educational tools on hand include:

• Live webinars
• On-demand webinars
• Weekly Fidelity classes for beginning investors
• Interactive coaching sessions
• Investment guides
• Articles

While some online brokerages take a bare-bones approach to investor education, Fidelity equips you with plenty of tools to make informed decisions. These tools are free to access as a Fidelity customer, which is great if you don’t have a dedicated financial advisor yet because you’re unable or unwilling to pay a fee for professional investment advice.

Fidelity security

• SIPC coverage
• Online security
• Customer protection guarantee

SIPC coverage

The Securities Investor Protection Corporation (SIPC) insures against financial losses if a brokerage goes bankrupt. All Fidelity brokerage accounts have SIPC coverage, which extends to money market funds as well as other securities. The coverage limit is up to $500,000, including a $250,000 limit for cash held inside your brokerage account.

Online security

Fidelity uses a number of strategies to protect client accounts online. That includes the use of two-factor authentication to verify accounts, the ability to lock accounts to prevent money transfers, security text alerts and voice recognition through Fidelity MyVoice when accessing your account by phone.

Customer protection guarantee

Fidelity offers a Customer Protection Guarantee to reimburse investors for losses associated with unauthorized account activity. That includes both cash and securities held in Fidelity brokerage accounts. This coverage is automatic, but to use this benefit, you must contact Fidelity at 800-544-6666 as soon as you become aware of any suspicious or unauthorized activity.

Alternatives to Fidelity to consider

Fidelity could be a good fit for investors who want to make commission-free trades, invest with fractional shares or take advantage of Fidelity‘s extensive research and investment tools. It’s important, however, to consider where other brokerages might outshine Fidelity in terms of cost, investment Options and overall user experience. Here are two other Options to compare to Fidelity when opening a brokerage account.

Open account Secured

on Fidelity’s secure website

Fees

$0.00 per trade

Account Minimum

$0

Promotion

N/A

Get Started Secured

on Vanguard’s secure website

Fees

$7.00 per trade for the first 25 trades per year, $20 per trade thereafter for accounts with less than $50,000

$7 per trade for accounts with $50,000 to $500,000

Account Minimum

$1,000 for Vanguard Target Retirement Funds and Vanguard STAR® Funds; $3,000 for most other Vanguard funds

Promotion

N/A

Open account Secured

on TD Ameritrade’s secure website

Fees

$0.00 per trade

Account Minimum

$0

Promotion

N/A

Fidelity vs. Vanguard

Vanguard is a well-known name in the online brokerage space, thanks largely to its suite of low-cost index funds and ETFs. In terms of fees and account minimums, Fidelity and Vanguard are almost identical, though it will cost you slightly more per Options contract with the latter.

In terms of investment offerings, they’re similar, but the main point to consider is whether you lean more toward Fidelity funds or Vanguard funds. When it comes to user experience and investment tools, Fidelity has a slight edge with Active Trader Pro. Fidelity‘s website is also easier to navigate.

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Fidelity vs. TD Ameritrade

Fidelity and TD Ameritrade are neck and neck in terms of investment costs and minimums, though you will need at least $2,000 to trade on margin with TD Ameritrade. But this brokerage does offer a few things Fidelity doesn’t, including cryptocurrency and futures trading, as well as multiple online trading platforms designed to meet different investors’ needs.

One other thing worth pointing out is that TD Ameritrade‘s broker-assisted trade fee is lower than Fidelity‘s, at $25 versus $32.95. Whether it makes sense to choose Fidelity over TD Ameritrade or vice versa may ultimately come down to which brokerage’s funds you prefer.

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on TD Ameritrade’s secure website

All information included in this profile is accurate as of 1/14/2021. For more information, please consult Fidelitys’s website.