Blue Light Special

[W2R]

Quote:

Originally Posted by simple girl Linney, We put in a buy for VTSMX yesterday, too (we buy once every 2 or 3 weeks). However, the transaction won't actually go through until the end of today. Our luck (as has happenned in the past) is that there will be a big rally today. Did you put your buy in yesterday or the day before? To my knowledge, with Vanguard, you can't put a buy in and get it to go through that same day. There is always a delay. This is one of the things that does really frustrate me with Vanguard. Oh well, I know, shouldn't be trying to time the market, right?

simplegirl, when I bought these equity funds I actually did it as an exchange from VMMXX (Vanguard's Prime Money Market). That was yesterday at 10:58 A.M. Eastern time. I just checked my account and the exchange was completed at yesterday's closing price. If you are uploading the money from your bank, it takes quite a bit longer as I recall since the upload takes some time.

[simple girl]

Quote:

Originally Posted by Want2retire simplegirl, when I bought these equity funds I actually did it as an exchange from VMMXX (Vanguard's Prime Money Market). That was yesterday at 10:58 A.M. Eastern time, and the exchange was completed at yesterday's closing price. If you are uploading the money from your bank, it takes a bit longer as I recall.

VERY interesting! I'd be willing to move our "stash of cash" to VMMXX for this benefit alone! Wow, thanks for the tip. I will be investigating it this weekend.

[Poundkey]

Quote:

Originally Posted by simple girl Linney, We put in a buy for VTSMX yesterday, too (we buy once every 2 or 3 weeks). However, the transaction won't actually go through until the end of today. Our luck (as has happenned in the past) is that there will be a big rally today. Did you put your buy in yesterday or the day before? To my knowledge, with Vanguard, you can't put a buy in and get it to go through that same day. There is always a delay. This is one of the things that does really frustrate me with Vanguard. Oh well, I know, shouldn't be trying to time the market, right?

Actually, I think you can get it at that days price. Seems like you have to put in your order an hour before the close of that day's markets. For me (central time zone) I believe 2:00 pm is the cut off time.

[W2R]

Quote:

Originally Posted by Poundkey Actually, I think you can get it at that days price. Seems like you have to put in your order 2 hours before the close of that day's markets. For me (central time zone) I believe 2:00 pm is the cut off time.

I had thought the cutoff time was 1:00 PM or 1:30 PM Eastern time, but a new or infrequent poster messaged me a few days ago when I was lamenting about not getting in on the big drop in the Dow last week. I believe he told me he put in an order at 4:00 PM Eastern and it still went through. So now I am a little confused about the timing. Maybe he was just fortunate or maybe the cutoff time is later than either of us thought!

[windsurf]

I think the Vanguard instructions say that it will be processed on the day received. I put in for a transfer from the Prime Money Market Fund to 25k of Vanguard Diversified Equity Fund at around 3:40 EST and it immediately showed as a pending transaction then this a.m. the funds had transferred at yesterday's closing price.

I submitted for Vanguard's Planning service a few months ago and started averaging in per the recommendations. Quite a chunk was designated for the Diversified Equity Fund along with, of course the Total Stock Market and Total Bond Market indexes. It is a newer fund that did a little under 6% since inception in '05. They have me slated to go 20% of total portfolio in this fund. Any thoughts as to why they would be thinking that this fund is such a good idea?

[W2R]

Quote:

Originally Posted by windsurf I think the Vanguard instructions say that it will be processed on the day received. I put in for a transfer from the Prime Money Market Fund to 25k of Vanguard Diversified Equity Fund at around 3:40 EST and it immediately showed as a pending transaction then this a.m. the funds had transferred at yesterday's closing price.

That is good to know! Thanks.

Quote:

Originally Posted by windsurf I submitted for Vanguard's Planning service a few months ago and started averaging in per the recommendations. Quite a chunk was designated for the Diversified Equity Fund along with, of course the Total Stock Market and Total Bond Market indexes. It is a newer fund that did a little under 6% since inception in '05. They have me slated to go 20% of total portfolio in this fund. Any thoughts as to why they would be thinking that this fund is such a good idea?

Looks like VDEQX is a fund of funds seeking capital appreciation and dividend income for those with an investment horizon of over five years. The expense ration is 0.38, which is higher than Vanguard index funds, for example, because of the managed funds it holds.

VDEQX holds these funds: Vanguards Growth and Income, Windsor, Windsor II, U.S. Growth, Morgan Growth, Explorer, Capital Value, and Mid-Cap Growth fund. It is a fund of funds that has a large cap tilt but does not have a value tilt, so maybe that is another factor contributing to their reasoning in recommending it.

I would recommend asking about your portfolio over at the Bogleheads forum, at Bogleheads :: Index for their opinions of this fund.

[Linney]

Quote:

Originally Posted by simple girl Linney, We put in a buy for VTSMX yesterday, too (we buy once every 2 or 3 weeks). However, the transaction won't actually go through until the end of today. Our luck (as has happenned in the past) is that there will be a big rally today. Did you put your buy in yesterday or the day before? To my knowledge, with Vanguard, you can't put a buy in and get it to go through that same day. There is always a delay. This is one of the things that does really frustrate me with Vanguard. Oh well, I know, shouldn't be trying to time the market, right?

simplegirl,

Like W2R, I do it as an exchange from Vanguard Money Market into Total Stock Market Index. I did my transaction around 3pm Eastern Time yesterday and the exchange was completed and I got yesterday's closing price.

Doing exchanges from MM --> VTSMX is a great way to go if you want to avoid delays in purchasing.

[Linney]

Quote:

Originally Posted by windsurf I think the Vanguard instructions say that it will be processed on the day received. I put in for a transfer from the Prime Money Market Fund to 25k of Vanguard Diversified Equity Fund at around 3:40 EST and it immediately showed as a pending transaction then this a.m. the funds had transferred at yesterday's closing price.

Quote:

Originally Posted by Want2retire That is good to know! Thanks.

I watch the price of VTI (Vanguard Total Stock Market ETF) on days like yesterday and it gives me a pretty good idea of what VTSMX will close at. Same for VFWIX, you can watch the price of VEU throughout the day.

Then, like windsurf, I put in my order with Vanguard during the last hour of trading. I haven't tried to get too close to 4pm Eastern Time, but all the orders I have placed between 3pm - 3:45 ET have always gone through successfully that same day (using an exchange from my MM account).

--Linney

[W2R]

Quote:

Originally Posted by Linney I watch the price of VTI (Vanguard Total Stock Market ETF) on days like yesterday and it gives me a pretty good idea of what VTSMX will close at. Same for VFWIX, you can watch the price of VEU throughout the day.

Very clever! I'll remember that (even though I really TRY not to market time, but I do have to buy sometimes).

Looks like yesterday was a great day to buy. The Dow seems to have bounced back up around 150+ points so far today.

One time I won several hundred dollars on the quarter slot machines. That felt great, too! I guess as long as I know that is what I am doing....

Now in April and May, I DCA'd on the pre-determined day just as I should. So probably this is the last market timing/gambling I will engage in for this summer.

[simple girl]

Linney and W2R,

A few follow-up questions:

1) Are there any transaction fees for purchasing VTSMX (etc.) via VMMXX?

2) What I have now is a money market deposit account (not a fund) with my credit union - APY is 2.53%. What do I compare this to on VMMXX? I see it has a 7 day yield of 2.20% and a 1 year return of 4.83%. Not sure which is the better deal as I don't know how to compare the 2 types of accounts. Also, the Vanguard fund has expenses to consider (.24%). If the overall return from my credit union account is better, I'll just keep a smaller amount in the Vanguard fund and add to it as I need to for transactions. However, if VMMXX is the better deal, I'll keep the bulk of our extra monies there while waiting to invest them. Sorry if this is confusing. I hope my question makes sense.

[W2R]

Quote:

Originally Posted by simple girl Linney and W2R, A few follow-up questions: 1) Are there any transaction fees for purchasing VTSMX (etc.) via VMMXX?

No, not unless the equity fund itself has purchase fees (but in that case they would apply no matter how you bought it). There might be if you did this frequently but I don't buy or sell that often.

Quote:

Originally Posted by simple girl 2) What I have now is a money market deposit account (not a fund) with my credit union - APY is 2.53%. What do I compare this to on VMMXX? I see it has a 7 day yield of 2.20% and a 1 year return of 4.83%. Not sure which is the better deal as I don't know how to compare the 2 types of accounts. Also, the Vanguard fund has expenses to consider (.24%). If the overall return from my credit union account is better, I'll just keep a smaller amount in the Vanguard fund and add to it as I need to for transactions. However, if VMMXX is the better deal, I'll keep the bulk of our extra monies there while waiting to invest them. Sorry if this is confusing. I hope my question makes sense.

Sure, it makes a lot of sense! The 4.83% is over the whole past year, and as you probably recall interest rates were higher earlier in the year. So, the interest rate that you will get right now is the rate just over 2%. You get it added to your account at the end of each month.

As a practical example, on May 30th I received an amount equal to 0.00213 times my balance, in interest, added to my VMMXX account. (When multiplied by 12, this comes out to 2.556% which mystifies me, but I presume this is explained by compounding and by the fact that May was 31 days long instead of 28 or 30, and by changing interest rates.)

Hope this helps!

[simple girl]

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Originally Posted by Want2retire Sure, it makes a lot of sense! The 4.83% is over the whole past year, and as you probably recall interest rates were higher earlier in the year. So, the interest rate that you will get right now is the rate just over 2%. You get it added to your account at the end of each month. As a practical example, on May 30th I received an amount equal to 0.00213 times my balance, in interest, added to my VMMXX account. (When multiplied by 12, this comes out to 2.556% which mystifies me, but I presume this is explained by compounding and by the fact that May was 31 days long instead of 28 or 30, and by changing interest rates.) Hope this helps!

This helps a lot, thank you! I will keep my credit union account (slightly better rate and no other expenses) but funnel money into VMMXX as needed to allow for more efficient purchases of VTSMX. Great thread - thanks again!

[Linney]

Quote:

Originally Posted by simple girl Linney and W2R, 1) Are there any transaction fees for purchasing VTSMX (etc.) via VMMXX?

Quote:

Originally Posted by Want2retire No, not unless the equity fund itself has purchase fees (but in that case they would apply no matter how you bought it). There might be if you did this frequently but I don't buy or sell that often.

W2R has it right -- no transaction fee is charged for doing the exchange. You do have to pay any applicable purchase fees for the fund that you are buying. There is no purchase fee for VMMXX or VTSMX (VTSMX has an early redemption fee, not a problem if you buy-and-hold). Another fund that we both purchase, VFWIX, does have a small purchase fee.

[kaudrey]

I'm continuing to DCA too. My TSP is buying today, and my taxable account will be getting a transfer Monday morning so I'll be buying more then!

Gotta love these buying opportunities!

[W2R]

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Originally Posted by kaudrey I'm continuing to DCA too. My TSP is buying today, and my taxable account will be getting a transfer Monday morning so I'll be buying more then! Gotta love these buying opportunities!

So true!!! The market is up 150+ points already this morning, but then I said that yesterday morning and it sagged again before closing. I have high hopes, though...

[Zoocat]

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Originally Posted by Want2retire Sure does! I didn't realize that you were still working, like me! For some reason I thought you were already retired. I guess next year will be my last Roth contribution. Emerging Markets have taken a beating lately, so I think it was probably a really good time to buy.

yes, I am still working pt in order to contribute to my ROTH. In fact, am working away in between reading and posting on here. My job is not too annoying and worth it for the opportunity of ROTH contribution which is one of the great (and only?) deals from our beloved IRS.

Too bad I missed the blue light special. I'm planning on adding to my VG Health Fund. It's gone down some this year and is a pretty good buy now. It's closed to new investors though.

[megacorp-firee]

DMT alert ... DMT alert ...

IMHO I don't think that the rollercoaster ride is over yet. There still seem to be a lot of sellers out there. However, good luck to those of you who have DMT accelerated your DCA .
Be sure to keep your seatbelt tight.

On the other hand, ... it's seems low enough right now and 10 years from now it will be a small rise in the road.

[W2R]

Wahoo!!! The Dow is up 150 points so far.

You're right, megacorp-firee - - I'm a closet DMT but trying to hold it in check!

[Dawg52]

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Originally Posted by Want2retire Wahoo!!! The Dow is up 150 points so far. You're right, megacorp-firee - - I'm a closet DMT but trying to hold it in check!

Maybe I will drink an extra beer tonight at the club to celebrate. Of course I drank 2 extra beers last week when I was crying in my beer.

[W2R]

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Originally Posted by Dawg52 Maybe I will drink an extra beer tonight at the club to celebrate. Of course I drank 2 extra beers last week when I was crying in my beer.

Hmmm. Extra beer when the market is down, extra beer when the market is up? Sounds like you've got this ER thing figured out.