Leaving Vanguard ASAP

[FUEGO]

The great thing about Vanguard's restrictive policies is that they piss off and alienate all the right people. Those who place a high value on trading in and out of mutual funds more often than once every month or two will transfer their assets out of the fund and leave for "greener" pastures elsewhere. Leaving the other 90-95% of investors (weighted by asset value) who have a long term focus with lower costs due to less trading. I can't complain.

[Bestwifeever]

Yes, do tell us the secret behind the frequent trading restrictions FinanceDude! I googled the term and found this language for Vanguard and Fidelity, which is similar to other funds, but we're waiting with bated breath for you to tell us the real reason (.....):

Vanguard says: "Because excessive transactions can disrupt the management of a fund and increase the fund's costs for all shareholders, Vanguard places certain limits on exchanges and other transactions."

Fidelity says: "Excessive trading can be expensive and burdensome for long-term shareholders because it can:

• Reduce returns to long-term shareholders by increasing fund costs (such as brokerage commissions)
• Disrupt portfolio management strategies, such as forcing untimely and unwanted buying and selling of portfolio securities. "

[73ss454]

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Originally Posted by FinanceDude Shucks, I don't work at AG Edwards............

Hey, if your expense ratios are higher I'll just go with you.

[jayc]

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Originally Posted by Texas Proud To the OP.... did you move Or was it just a vent....

I did not move yet. My confussion was the destination MM fund had $40K in it from the rollover. I did not pick this fund or put money in it. Vanguard did. I guess they can load it with any amount they want. It was initially explained as a MM sweep acct. So it never occurred to me that this fund has a dollar limit. It had nothing to do with time between transactions. Maybe it is their way of gently pushing you into other funds. I also had no other option to put the $ in a cash acct.

[FinanceDude]

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Originally Posted by 73ss454 Hey, if your expense ratios are higher I just go with you.

You wouldnt like me as an advisor, I charge a lot less than most advisors..........

[Texas Proud]

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Originally Posted by jayc I did not move yet. My confussion was the destination MM fund had $40K in it from the rollover. I did not pick this fund or put money in it. Vanguard did. I guess they can load it with any amount they want. It was initially explained as a MM sweep acct. So it never occurred to me that this fund has a dollar limit. It had nothing to do with time between transactions. Maybe it is their way of gently pushing you into other funds. I also had no other option to put the $ in a cash acct.

There are plenty of MM funds in Vanguard...

Is it connected to a brokerage account? If not, what are the 'sweeping' into it? It could be a sweep account, but still have restrictions on you moving money into it...

Sooooo, with this knowledge... are ya still going?

[FinanceDude]

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Originally Posted by Bestwifeever Yes, do tell us the secret behind the frequent trading restrictions FinanceDude! I googled the term and found this language for Vanguard and Fidelity, which is similar to other funds, but we're waiting with bated breath for you to tell us the real reason (.....): Vanguard says: "Because excessive transactions can disrupt the management of a fund and increase the fund's costs for all shareholders, Vanguard places certain limits on exchanges and other transactions." Fidelity says: "Excessive trading can be expensive and burdensome for long-term shareholders because it can: Reduce returns to long-term shareholders by increasing fund costs (such as brokerage commissions) Disrupt portfolio management strategies, such as forcing untimely and unwanted buying and selling of portfolio securities. "

Now tell me how that explains the rule for MM funds.........

[REWahoo]

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Originally Posted by FinanceDude Now tell me how that explains the rule for MM funds.........

It doesn't - any more than it explains the rule for using a new plate each time you take a trip to the salad bar.

The discussion (which you initiated) is about frequent trading restrictions, not closed Treasury/federal money market accounts.

Let's try to stay focused here...

[FinanceDude]

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Originally Posted by REWahoo Let's try to stay focused here...

Interesting post, coming from you.........

[REWahoo]

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Originally Posted by FinanceDude Interesting post, coming from you.........

No arguement here...

However, you've indicated you know the "real reason" behind Vanguard's trading restrictions and were asked what that reason was by more than one poster. You haven't responded with an answer and as a Vanguard client I'd really like to know.

[FinanceDude]

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Originally Posted by REWahoo No arguement here... However, you've indicated you know the "real reason" behind Vanguard's trading restrictions and were asked what that reason was by more than one poster. You haven't responded with an answer and as a Vanguard client I'd really like to know.

It is quite simple really, makes perfect sense. Vanguard holds VERY LITTLE cash in reserve for redemptions. Since VG is a passive investment company, they want folks to invest and stay in the funds. Most fund managers keept 3-5% in cash for redemptions, VG is more like 1% or so. Just a different way of doing things......I got that from a VG manager who was at a meeting I went to, he was talking about their ETF portfolios, but was asked about it at a Q&A........

[REWahoo]

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Originally Posted by FinanceDude It is quite simple really, makes perfect sense. Vanguard holds VERY LITTLE cash in reserve for redemptions. Since VG is a passive investment company, they want folks to invest and stay in the funds. Most fund managers keept 3-5% in cash for redemptions, VG is more like 1% or so.

IOW, to keep the funds fully invested and hold costs down - just as Bestwifeever said.

Thanks.

[Major Tom]

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Originally Posted by FUEGO The great thing about Vanguard's restrictive policies is that they piss off and alienate all the right people. Those who place a high value on trading in and out of mutual funds more often than once every month or two will transfer their assets out of the fund and leave for "greener" pastures elsewhere. Leaving the other 90-95% of investors (weighted by asset value) who have a long term focus with lower costs due to less trading. I can't complain.

+1

Also, how seriously can you take a post in which the OP calls Vanguard "a nickel and dime store"?

[FinanceDude]

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Originally Posted by Major Tom +1 Also, how seriously can you take a post in which the OP calls Vanguard "a nickel and dime store"?

Just because most folks on here think VG walks on water, well, that still doesn't make them Jesus..............

[Major Tom]

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Originally Posted by FinanceDude Just because most folks on here think VG walks on water, well, that still doesn't make them Jesus..............

That wasn't the point I was trying to make. Referring to them (or thinking of them) as "Jesus" , is obviously an extreme and unrealistic characterization. In the same way, so is referring to them as a nickel and dime store.

My opinion only, of course.

[REWahoo]

Dude, put down the shovel...

[FinanceDude]

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Originally Posted by Major Tom That wasn't the point I was trying to make. Referring to them (or thinking of them) as "Jesus" , is obviously an extreme and unrealistic characterization. In the same way, so is referring to them as a nickel and dime store.

It is someone's opinion, they have the right to that, right? It is ok to be a fan of VG and an investor of VG, but folks should be a little less prickly, as even they make mistakes..........and piss people off, and don't do what they say, noone's perfect, not even VG.........

[Texas Proud]

I don't think they walk on water... so no Jesus complex for me to worry about....

BUT, the do offer some very low cost funds that nobody else seem to want to offer (except the Spartan funds at FIDO)...

One of the other things that I also like is they seem to invest in what they say the fund is about... I remember having some money in FIDO way back when in the asset allocation fund... there was a big loss that did not make much sense at the time... learned later that the fund manager made a big play on Mexican pesoes at the wrong time... since the AA fund was not supposed to be international.... I was wondering why they were playing in Mexico.... I have heard this was fixed, but who knows for sure...

And how many funds got caught up in the selling to brokers after close? Or some other funny thing that helped the investment company at the expense of the investors... so far I have not heard any of this kind of stuff happening at VG.... maybe you can share something

I do have funds in FIDO, but not that much (current company 401).... and I am not negative to them.... I just think they charge to much....

[73ss454]

What pisses me off is after I read my first investment book and found out what my broker was up to. Now that pisses me off!

Vanguard may make a few mistakes here and there but it's the best alternative out there, at least IMHO.

[73ss454]

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Originally Posted by FinanceDude Just because most folks on here think VG walks on water, well, that still doesn't make them Jesus..............

Would you believe Moses?