Bonds and moving to Vanguard

[F4mandolin]

Well, finally called the EJones guy today to let him know I was moving things over to Vanguard pretty soon. He was fine with it, but he brought up something I didn't know the answer to about the bonds part of things. We moved some things around this last Sept and he said that if I move the bonds over to Vanguard there would be some cost issues with having picked some up 8 months ago. I was likely just going to move almost everything over to the Wellington (Admiral shares) with a little extra going into the International stocks. What are the problems here? I still have to get hold of Vanguard to see what the process will be.

 

[travelover]

For all you have paid him, Mr. Jones owes you a better explanation.

 

[pb4uski]

For all you have paid him, Mr. Jones owes you a better explanation.

+1 sounds like smoke and mirrors to me

 

[brewer12345]

What he is playing is the sunk cost fallacy (google if you wish). Ignore hime and get on with life.

 

[tightasadrum]

Some bond funds have a penalty if you sell them inside of a certain number of months. I'm surprised it would last over eight months though. Just look up the funds or bonds you're invested in. It should say.

 

[seraphim]

I'd pin him down about the exact costs as well: is he referring to a 'loss', or is there a charge for doing the transfer? DW had an inhereted accoun, and there was a fee for transferrring the money.

Make him be specific.

 

[F4mandolin]

I am expecting all kinds of fees. Fee's for closing each fund I believe. Unless there is a direct horrible fee for moving the money out of the bond funds it's still going to happen. I think he will take one more crack at me on Tuesday... we are going golfing together. He just took up golf this year and has wanted to play with me for quite a while (I shot 77 yesterday). Kind of strange that he called me to play golf....and then I returned the call saying I was moving the money but still more than happy to go golfing.

 

[seraphim]

Don't make any wagers ... He might be a ringer lol.

 

[F4mandolin]

Luckily I don't have a gambling problem (unless you consider EJ to be gambling). I consider golf to be gambling all by itself.....and as my anti-sport wife tells me..."All you do is hit that little ball with a stick....and you pay money to do it?"

 

[brewer12345]

I am expecting all kinds of fees. Fee's for closing each fund I believe. Unless there is a direct horrible fee for moving the money out of the bond funds it's still going to happen. I think he will take one more crack at me on Tuesday... we are going golfing together. He just took up golf this year and has wanted to play with me for quite a while (I shot 77 yesterday). Kind of strange that he called me to play golf....and then I returned the call saying I was moving the money but still more than happy to go golfing.

I think you are misunderstanding what you should do. You don't want to liquidate everything at EJ and then transfer cash. Instead, you want to transfer the assets "in kind" meaning you end up with all the same investments but at VG instead of EJ. Then when the assets are at VG you sell them (under VG's greatly reduced fees rather than EJ's assume-the-position rates), redeploying them into less costly options (you may even choose to keep some of what you have, such as the individual bonds). Make very sure that you "transfer in kind." If you fill out the forms and send them to VG they will do the dirty work of moving the securities over.

 

[LOL!]

It is not clear to me if these are bond funds or just bonds. Vanguard can hold bonds for you.

Also, some funds have contingent-deferred sales charges. This is typical of B shares. If a CDSC is going to be reduced or dropped in a month or two, I would wait for that to happen, then transfer.

 

[F4mandolin]

Thanks for the heads up Brewer12345. At least in the main part ($238K)of the EJones stuff my funds are as follows.
AMCAP $48k
American high income - $21k
Capital World Bond- $12k
Captial World Growth+Income- $18k
Europacific Growth- $16k
Fundamental Investors- $33k
Intermediate Bond- $38k
SmallCap- $17k
Washington Mutual Investors- $33k

Roth has some of the same - $53k total
AMCAP- $9k
Bond fund of America- $10k
Capital World Growth/Income- $6500
Europacific Growth- $3300
Fundamental Investors- $5k
Investment company of America - $2500
New Economy- $5300
SmallCap -$5100
Washington Mutual Investors- $5500
Investment company of America - $2500

I plan to push through the details on Tuesday when I golf with him. I am still planning on putting most of it in the Wellington with maybe $30-40k in the International. I also need to talk to Vanguard to find out how to move (if I can) the CD/corporate/cash over that is covering me the next 3-4 years($70k+).

Thanks for the help folks.

 

[brewer12345]

You should have no problem moving the non-fund pieces to VG.

 

[F4mandolin]

Non "bond" fund?

 

[brewer12345]

What I was trying to say is that I believe everything you hold through an account at EJ you should be able to hold through VG. You should not have to sell anything when you transfer the account.

 

[F4mandolin]

Thanks....appreciate any and all advice. Just need to line things up with Vanguard.