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Old 02-27-2021, 08:14 AM   #1
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Good problem to have....

Good morning everyone, I have a question about investment houses. I have most of my investments in multiple funds through Vanguard, roth, mutual funds ,etc... I have a good bit of money in a money market that was going to be used to buy a cabin in the woods. Prices are just too high in the market and I am holding off on that. I would like to invest that money back into the market but was wondering if I should go with someone like Fidelity or Schwab? Is there a risk with keeping all your investments in one investment house? Is the saying "do not keep all your eggs in one basket" relative in this situation?

Thank you
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Old 02-27-2021, 08:46 AM   #2
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Depending upon who you ask, and what you are protecting from it might make sense or not. I do keep assets at different brokers, fund providers for multiple reasons. None have to do with what happens if XYZ provider goes away.

I was locked out of my Fidelity brokerage account when my DF'S estate transferred money to it from a TOD. Why? My dad died in the state of Pennsylvania and I owed 10% tax on his estate, a fraction of the brokerage account. PA doesn't have a sense of humor about their nonsense and our account is locked until his estate is settled. Can this happen to you? There's any number of things that could cause you to have legal issues.

My career was in technology and I've been in datacenters when they were experiencing opportunities for improvement. Am I worried about how they recover? Not anymore. I know eventually they will turn the lights on. I don't want to need money while they figure things out. So for me the added complexity is worth it. YMMV.
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Old 02-27-2021, 08:51 AM   #3
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Some diversity is not a bad thing in my view. Most of my assets are at E-Trade (now owned by Morgan Stanley) but also some at Fidelity and TDAmeritrade (now owned by Schwab).

The primary goal was not broker diversity but it is a nice side benefit.
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Old 02-27-2021, 08:58 AM   #4
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Originally Posted by mopar lover View Post
Good morning everyone, I have a question about investment houses. I have most of my investments in multiple funds through Vanguard, roth, mutual funds ,etc... I have a good bit of money in a money market that was going to be used to buy a cabin in the woods. Prices are just too high in the market and I am holding off on that. I would like to invest that money back into the market but was wondering if I should go with someone like Fidelity or Schwab? Is there a risk with keeping all your investments in one investment house? Is the saying "do not keep all your eggs in one basket" relative in this situation?

Thank you
I do not believe there is any risk that would make me divide up assets into different institutions. The names you have mentioned (Vanguard, Fidelity, Schwab) are all reputable firms. Of course, there all always some risks in life. I find it most easy to manage with one investment house.

If it makes you feel better then open another account and you can always transfer funds into it if you get nervous. We have an account with another firm but only use it for the debit card they have (Schwab 1).
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Old 02-27-2021, 08:59 AM   #5
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Good problems to have you say. We have most of our stock stuff in Vanguard. Gal has some retirement stuff in Cantella because she worked with and likes and follows from firm to firm a broker. We have some stuff with JP Morgan Chase because they offered a $1000 bonus and call her a private client and we get to play with a Sapphire Reserve card. I just moved some VTI to BofA for a $1000 bonus. For us multiple banks and brokerages aren't so much for safety as much as the goodies - tempt the fat kids with candy.
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Old 02-27-2021, 09:00 AM   #6
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As in MRG's example, I think the biggest risk with eggs in one basket is getting locked out of your account due to fraud, error, or government action. That is one of the reasons I kept my 401(k) with megacorp while all my other accounts are with Vanguard. That way if one gets locked up/down I can access the other.
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Old 02-27-2021, 10:24 AM   #7
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Originally Posted by mopar lover View Post
Good morning everyone, I have a question about investment houses. I have most of my investments in multiple funds through Vanguard, roth, mutual funds ,etc... I have a good bit of money in a money market that was going to be used to buy a cabin in the woods. Prices are just too high in the market and I am holding off on that. I would like to invest that money back into the market but was wondering if I should go with someone like Fidelity or Schwab? Is there a risk with keeping all your investments in one investment house? Is the saying "do not keep all your eggs in one basket" relative in this situation?

Thank you

Not currently residing inside the US.

Have Close to 90% in VG, all our tIRA's and Roths and savings. Also have Schwab accounts that have a small MM account as well as some VG funds for after tax savings. Then have a straight Cap One MM account for ATM purposes. Since Schwab and Cap One have no fee ATM's world wide this gives us several sources to access our funds. Main checking account at brick & mortar bank for paying all the bills and central clearing house for all accounts. Also atm card as final choice if needed for some reason, fees outside the US for accessing.

Like having several options if needed.
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Old 02-27-2021, 10:26 AM   #8
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As in MRG's example, I think the biggest risk with eggs in one basket is getting locked out of your account due to fraud, error, or government action. That is one of the reasons I kept my 401(k) with megacorp while all my other accounts are with Vanguard. That way if one gets locked up/down I can access the other.
Especially in these days of low interest rates there is little cost to keeping a healthy cash balance in a checking account with the necessary alerts in place. If we were locked out (very, very remote possibility) then we'd be fine for months.

Could always get a temporary loan or borrow from a relative in such a weird emergency. Also, being a customer for decades must count for something as they could lock up all but emergency funds.

Please note, if you are a drug king my comments do not apply.
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Old 02-27-2021, 10:38 AM   #9
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Especially in these days of low interest rates there is little cost to keeping a healthy cash balance in a checking account with the necessary alerts in place. If we were locked out (very, very remote possibility) then we'd be fine for months.

Could always get a temporary loan or borrow from a relative in such a weird emergency. Also, being a customer for decades must count for something as they could lock up all but emergency funds.

Please note, if you are a drug king my comments do not apply.
ha ha ha ha ha....

Often in my experience being a customer for decades doesn't matter.
Only mattered once and quite possibly then it was only that they had a non-defensible position and knew they had screwed up terribly.

I often have more than 1 bank or brokerage, so when Washington Mutual failed, I wasn't worried as I had cash somewhere else I could access.

Having more than 1 bank/brokerage is simply safer and only a minor extra effort when done correctly.
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