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Taxable accounts
Old 12-10-2014, 12:08 PM   #1
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Taxable accounts

Please let me know your suggestions for brokerages where I can set up a taxable account. I was hoping to open an account that would invest in the index and help fund my ER for the decades before 401k and IRA withdrawals. Thanks in advance.


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Old 12-10-2014, 12:38 PM   #2
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Welcome! Please introduce yourself so we can know a little more about your specific situation: Hi, I am... - Early Retirement & Financial Independence Community

To answer your question, there are lots of options. If you want to invest in multiple fund families and/or individual stocks, most folks here would go with a discount brokerage such as Schwab, TD, etc.

If you want to (mostly) stick with a low-cost fund family, the three most often mentioned here are Vanguard, Fidelity, and T Rowe Price. If your IRA is already with one of these and you're happy, it's easy to set up taxable accounts at the same place. Or you can do a trustee-to-trustee transfer to move them into one place (easier to manage for most of us).

Hope this is helpful.
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Old 12-10-2014, 01:12 PM   #3
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Old 12-10-2014, 01:40 PM   #4
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Vanguard.com would be an excellent place to invest in index mutual funds.

Other places to use would be TDAmeritrade.com and use Vanguard ETFs there (but sign up for the no-commission deal) and Fidelity.com and use Fidelity Spartan Index funds and some no-commission ETFs. And Schwab.com

Be aware that all these places sell other things, so watch out that you do not pay commissions and that you do not buy actively-managed funds.
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Old 12-10-2014, 03:30 PM   #5
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Thanks everyone for all the information.

I did take a look at the Spartan funds at Fidelity early on and was pleased by the low fees. Although Vanguard has notoriously low fees so it's a hard decision.

Has anyone opened taxable accounts at both Vanguard and Fidelity (to diversify brokerage accounts) and can push me one way or the other.
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Old 12-10-2014, 03:40 PM   #6
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Welcome, pihwoah!

Vanguard is where my taxable accounts are. I have been very happy with Vanguard.
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Old 12-10-2014, 05:00 PM   #7
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Having brokerage accounts at two different brokerages is NOT diversification.
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Old 12-10-2014, 05:27 PM   #8
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I have taxable funds at Vanguard, Fidelity, and T.RowePrice. There have been periods when actively managed funds did better than the index funds at Vanguard and vice versa. But over the long run, it seems the low expenses of Vanguard's index funds and the low taxes of their tax-managed funds gave me the best bang for my buck. I've been happy with all 3, however.
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Old 12-10-2014, 06:01 PM   #9
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Originally Posted by pihwoah View Post
Thanks everyone for all the information.

I did take a look at the Spartan funds at Fidelity early on and was pleased by the low fees. Although Vanguard has notoriously low fees so it's a hard decision.

Has anyone opened taxable accounts at both Vanguard and Fidelity (to diversify brokerage accounts) and can push me one way or the other.
I have Fidelity and Vanguard, but not really "on purpose".

There is a big difference between the two: one has share holders, the other is owned by the investors (Vanguard). The only diversification using both would offer is to "institutional risk". I kinda doubt either one would be going out of business, but during a panic, one web site and call center might crater before the other one. Of course nobody on this forum would even log on to check balances during the panic because it will simply be a buying opportunity after the dust settles.
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Old 12-10-2014, 06:54 PM   #10
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Originally Posted by sengsational View Post
I have Fidelity and Vanguard, but not really "on purpose".

There is a big difference between the two: one has share holders, the other is owned by the investors (Vanguard). The only diversification using both would offer is to "institutional risk". I kinda doubt either one would be going out of business, but during a panic, one web site and call center might crater before the other one. Of course nobody on this forum would even log on to check balances during the panic because it will simply be a buying opportunity after the dust settles.

That's not unlike what happened to me. I had accounts scattered all over the place among companies, got tired of the bookkeeping, and now only have a taxable brokerage account at Fidelity and a taxable mutual fund account at Vanguard.

Tax-deferred, Roth and 457 retirement/deferred compensation accounts are at those two plus T. Rowe Price.
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Old 12-10-2014, 08:08 PM   #11
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Originally Posted by pihwoah View Post
Thanks everyone for all the information.

I did take a look at the Spartan funds at Fidelity early on and was pleased by the low fees. Although Vanguard has notoriously low fees so it's a hard decision.

Has anyone opened taxable accounts at both Vanguard and Fidelity (to diversify brokerage accounts) and can push me one way or the other.
I have accounts at several brokerages. If you have more than $1,000 to invest, then consider this a push to Vanguard.

If you need to walk into an office to fill out forms and do not like to do things online, then do not use Vanguard.

If you have tax-advantaged accounts already at Fidelity, then use Fidelity.
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Old 12-10-2014, 08:57 PM   #12
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Originally Posted by sengsational View Post
I have Fidelity and Vanguard, but not really "on purpose".

There is a big difference between the two: one has share holders, the other is owned by the investors (Vanguard). The only diversification using both would offer is to "institutional risk". I kinda doubt either one would be going out of business, but during a panic, one web site and call center might crater before the other one. Of course nobody on this forum would even log on to check balances during the panic because it will simply be a buying opportunity after the dust settles.

I'm glad you understood what I meant regarding "diversifying brokerages". 😅
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Old 12-11-2014, 09:57 AM   #13
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I use Fidelity to house my mainly-Vanguard index ETFs, in both taxable and tax-deferred accounts. I like to think this is the "best of both worlds" but I'm sure there are other combos that are just as good.

I've thought about splitting funds between 2 different brokerages to DIVERSIFY my institutional risk. But I like the record-keeping advantages of keeping things in one place, as well as the perks of Private Client Group at Fidelity (even though I rarely talk to them). And I really don't think there's much additional risk of using one institution. In the unlikely event of some kind of system meltdown at Fidelity, I still have access to other funds.
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Old 12-11-2014, 12:07 PM   #14
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I have accounts at both Fidelity and at Vanguard.

I established the Fidelity account 4 years ago in an attempt to see which company I preferred. They both have pluses. I like Fidelity's website better; I find it easier to use and I think they display information better. I also like that there is a local branch close by, however I haven't used it since opening the account.

Vanguard of course has a much bigger selection of low cost index funds and they have the Wellesley mutual fund which I like for short term holdings.

So, 4 years later I am still undecided...
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Old 12-11-2014, 12:59 PM   #15
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Originally Posted by pihwoah View Post
Thanks everyone for all the information.

I did take a look at the Spartan funds at Fidelity early on and was pleased by the low fees. Although Vanguard has notoriously low fees so it's a hard decision.

Has anyone opened taxable accounts at both Vanguard and Fidelity (to diversify brokerage accounts) and can push me one way or the other.
I have taxable accounts with both. You really can't go wrong w/ either.

Might want to decide what funds you're looking at purchasing. If there is a significant difference in ER between the two, let that make the decision for you.
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Old 12-11-2014, 03:46 PM   #16
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Originally Posted by sengsational View Post
There is a big difference between the two: one has share holders, the other is owned by the investors (Vanguard). The only diversification using both would offer is to "institutional risk". I kinda doubt either one would be going out of business, but during a panic, one web site and call center might crater before the other one. Of course nobody on this forum would even log on to check balances during the panic because it will simply be a buying opportunity after the dust settles.
I'll add that Fidelity is privately held, mostly by the family and the employees. It is not as though it is publicly traded.

And you would probably find that both Vanguard and Fidelity's web sites (data centers, really) and call centers and employees are way more robust and geographically dispersed than most people would think. I worked in big data centers for 32 years -- the last 8 in contingency planning (disaster recovery).
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