really stupid question--how to buy mutual funds

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palomalou

Recycles dryer sheets
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Dec 22, 2010
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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:confused:?
 
Go straight to Vanguard. Check out "The Bogleheads' Guide to Investing" and perhaps "Mutual Funds for Dummies".
 
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.
 
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.
 
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.
 
brewer12345 said:
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.
 
LOL! said:
Go straight to Vanguard. Check out "The Bogleheads' Guide to Investing" and perhaps "Mutual Funds for Dummies".
Click to expand...

+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).
 
brewer12345 said:
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.
Click to expand...

ziggy29 said:
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.
Click to expand...

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.
 
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.
 
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.
 
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.
 
2B said:
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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+1. The money saved from dumping the FA can be invested in more mutual funds :)
 
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...:facepalm:
 
palomalou said:
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...:facepalm:
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We ditched Ameriprise in 2010. I'd be happy to share how we did it if you want to PM me.
 
palomalou said:
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...:facepalm:
Click to expand...
We've had some refugees who have already been "through the program". I'd imagine they would be happy to help others free themselves from their tentacles as well.

Lisa99 said:
We ditched Ameriprise in 2010. I'd be happy to share how we did it if you want to PM me.
Click to expand...

Soeaking of which...
 
I am currently with Fidelity, Vanguard, and Price - the main reason for having three of them is that it is (was ;)) related to workplace-related limitations. All three are fine, my plan is to end up with everything at Fidelity for convenience, low cost, and ease of bookkeeping. Currently, I am still waiting due to things like age-related restrictions, etc.

I've moved things around in the past, and my experience was that it generally involves liquidating, completing some paperwork to do a "transfer of assets" (which might involve things like signature guarantees), and then waiting for it to happen. A little bit of a pain, but well worth it (to me) in the end.

Then, once you have assets at your chosen brokerage or fund firm, they may start out in a money market or cash account, but you are then free to invest in your choice of funds.

Edit: please see additional comment by Nords below
 
Last edited:
palomalou said:
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...:facepalm:
Click to expand...

You could write a simple letter, mentioned to your FA, that "your path lies elsewhere." Not the exact wording, but similar. In otherwords, "Dear FA,
It's not you, it's me", leaving out the part that you've seen the light :LOL:
 
ziggy29 said:
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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I go at least that far back with Schwab too. To date, everything seems to work fine. And because my DW leans towards being financial-phobic, it's handy to have a nearby brick and mortar office where she could go for "how to" help should I be incapacitated.

I'm familar with both Fidelity and Vanguard and if Schwab stumbled I wouldn't hesitate to use either, perhaps with the exception that I think Vanguard's brokerage services are a bit weak.
 
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