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really stupid question--how to buy mutual funds
Old 05-08-2012, 08:59 PM   #1
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really stupid question--how to buy mutual funds

We have an FA, but I'm doubting the wisdom of that and wanting to buy some mutual funds "on our own." Very low fee. (We've already maxed out our tax-deferred contributions.) How do we do this? We were looking at Scottrade, etrade, td ameritrade but many have bad things to say about all of them. Should I go straight to Vanguard?
And what are the books we should check out of the library?
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Old 05-08-2012, 09:02 PM   #2
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Go straight to Vanguard. Check out "The Bogleheads' Guide to Investing" and perhaps "Mutual Funds for Dummies".
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Old 05-08-2012, 09:05 PM   #3
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+1 Vanguard is great. I have been with them for almost 20 years.
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Old 05-08-2012, 09:46 PM   #4
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And what are the books we should check out of the library?
Rick Ferri's "All About Asset Allocation", and his blog:
http://www.rickferri.com/blog/strate...et-allocation/
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Old 05-08-2012, 09:48 PM   #5
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You can check Vanguard online. Before you open an account anywhere, check to see if they have the mutual funds you want. The selection of no transaction fee funds will vary. For Vanguard funds, a Vanguard account will be your best bet. Also check on the minimum initial buy amount. Many of Vanguard's funds require a relatively high initial buy. E*Trade and a few others should have lower minimums, though not on Vanguard funds.

You might also try ETF's instead of mutual funds. Many brokerages have a selection of ETF's they offer with no trading fees. That's a great way to avoid fund minimums and early redemption fees if you can stay with the commission-free ETF's.
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Old 05-08-2012, 10:11 PM   #6
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Competition among the major brokers has driven prices down to very low levels. I would shop primarily on the basis of service and convenience among Vanguard, Schwab and Fidelity. All have stronger and weaker points, but they are all cheap and competent.
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Old 05-09-2012, 07:41 AM   #7
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Go straight to Vanguard. they just lowered rates on most of their index funds, and overall unless you want to be an active investor I see no value in going elsewhere. I have a couple of other accounts for diversity and keep asking myself why. I make more money, save on fees and never feel like I'm getting hustled. If you want your hand held, others are happy to do it and charge you for it. But......if you don't know what you are doing, get a little help here, from a financial advisor you pay by the hour or elsewhere. good luck.
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Old 05-09-2012, 11:10 AM   #8
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For a list of investment books, (and I totally agree with Nords' recommendation of the Ferri book), go to the links section here. Investment & Brokerage - Early-Retirement.org Links Directory
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Old 05-09-2012, 11:14 AM   #9
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Competition among the major brokers has driven prices down to very low levels. I would shop primarily on the basis of service and convenience among Vanguard, Schwab and Fidelity. All have stronger and weaker points, but they are all cheap and competent.
You can't go too wrong with any of these three. Vanguard has the most vocal cheering section, obviously. The main reason I'm not with Vanguard (my mom is, though) is because I've been a Schwab customer since 1989 and they really haven't given me reason to take my money elsewhere.
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Old 05-09-2012, 11:51 AM   #10
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Go straight to Vanguard. Check out "The Bogleheads' Guide to Investing" and perhaps "Mutual Funds for Dummies".
+1 This is perfect advice, IMO.

If you go to the Vanguard website you can peruse their funds, and IIRC you can sign up right there, transferring the money from your bank account or wherever it is to Vanguard. I think the initial transfer may take a few days but not long.

My brother recommended Vanguard to me for my first foray into investing, and then (being a cautious soul) I read a lot on the Vanguard Diehards forum at M*star to make sure he was right.* Since then I was and am sold on Vanguard.

*(This is how I originally heard about the ER forum - - from a post on Diehards, back before the Bogleheads board had split off).
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Old 05-09-2012, 12:45 PM   #11
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Competition among the major brokers has driven prices down to very low levels. I would shop primarily on the basis of service and convenience among Vanguard, Schwab and Fidelity. All have stronger and weaker points, but they are all cheap and competent.
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You can't go too wrong with any of these three. Vanguard has the most vocal cheering section, obviously. The main reason I'm not with Vanguard (my mom is, though) is because I've been a Schwab customer since 1989 and they really haven't given me reason to take my money elsewhere.
I've got Schwab and Vanguard. As did my father. We noted a big difference in customer service when my dad passed. To the point I've been slowly moving stuff to Schwab. Vanguard is great when you're living, but they kept losing copies of the death certificate and paperwork on multiple types of accounts. (IRA and taxable accounts handled by executor, and 529's for my son's handled by me.)

I still have Vanguard because some of their funds fit my goals well, and I like their 529, even if it the people running it lost the death certificates to transfer it multiple times...

Schwab did everything seamlessly - and also has low costs/good funds. So overall, I'm happier with Schwab.
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Old 05-09-2012, 12:53 PM   #12
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I've got Vanguard and Fidelity. Happy with both.
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Old 05-09-2012, 12:56 PM   #13
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another +1 for Vanguard...
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Old 05-09-2012, 01:03 PM   #14
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I've got Vanguard and Fidelity. Happy with both.
Ditto
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Old 05-09-2012, 01:09 PM   #15
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I am with Fidelity and Vanguard. I was with Fidelity and others 1st. Most every time I do analysis to invest in a fund, the winner usually is Vanguard. I am slowly moving my funds there.

Is it safe to say that Schwab has the best customer service of the three?

Comment: Even Vanguard is NOT your friend.
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Old 05-09-2012, 01:11 PM   #16
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Is it safe to say that Schwab has the best customer service of the three?
I can't say for sure, but I do know it's good enough -- and their rates and offerings competitive enough -- that I haven't felt any need to look for greener pastures.
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Old 05-09-2012, 01:22 PM   #17
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I've been with Fidelity, Vanguard and Schwab (401k). I'm all Vanguard now and I think they're the least likely to try to sell you anything you don't want, but I'd be comfortable with any of the three. I'd base my choice on what funds you want to hold, not vice Versa. I was with Fidelity when I held individual stocks and actively managed funds in the Peter Lynch era. Once I quit on individual equities and active funds for low cost index funds, Vanguard had much better choices, so I moved our entire portfolio.
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Old 05-09-2012, 02:33 PM   #18
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I'm surprised no one said the obvious or, at least, I didn't see it. You need to dump your FA ASAP after you do your homework on index investing and asset allocation. The FA is probably draining most of your market return in normal years and bleeding you dry in a down market. You didn't say what the FA has been putting you into but my experience says its overpriced garbage that makes them a bigger profit.

I'm at Vanguard and ETrade. ETrade is mostly for their on line bank.
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Old 05-09-2012, 04:04 PM   #19
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I'm surprised no one said the obvious or, at least, I didn't see it. You need to dump your FA ASAP after you do your homework on index investing and asset allocation. The FA is probably draining most of your market return in normal years and bleeding you dry in a down market. You didn't say what the FA has been putting you into but my experience says its overpriced garbage that makes them a bigger profit.

I'm at Vanguard and ETrade. ETrade is mostly for their on line bank.
+1. The money saved from dumping the FA can be invested in more mutual funds
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Old 05-09-2012, 04:58 PM   #20
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Oh so many thanks! I've been pondering the HOW to dump the FA since it seems that we're not getting what we're paying for. But that is another question...
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