Thoughts on Vanguard

[kgtest]

Some of my personal VG Favs:

VMMXX Money Market
VTI Total Market
VBK SmallCap
VOT MidCap
VUG LargeCap
MGK MegaCap
VHT Healthcare

 

[OldShooter]

What kind of interest do you get on your free cash? When I called and asked I was told .1%... There should be a better option IMO...

You're right. There is a better option. Standard sweeps go to Schwab Bank with interest rate at a pittance.

When this policy went into place, I groused to my Schwab guy and he suggested SWVXX. We've been using that ever since though I haven't done any research on alternatives. (https://www.schwab.com/public/schwa...ent/money_markets_funds/purchased_money_funds)

I don't begrudge them the policy; they have to make money somewhere. Other brokerages tout better sweep deals, but they are making their money somewhere too.

 

[fisemper]

I have had all week to do some comparisons with VG and Schwab. I am trying to keep things simple so I am looking at the 4-fund portfolio. Leaving out VG Total International Bond, the other three bonds are basically identical between VG/Schwab. Question now is, is there anything close to VTABX that Schwab has? I'm thinking of having a majority with Scwhab since my USAA transfer is being done automatically, but I may need to use VG for that extra bond.

When building my AA this week, I realized I was overthinking and decided the simple way was what works best for me now. I compared what I had come up with to the LifeStrategy funds and I was not off by much. Sitting between VG growth and moderate growth. Main difference is I have more percent allocated to international bond than stock, overall 70/30. The lower expense ratio of individual funds and flexibility of re-balancing is the only thing keeping me away from the LifeStrategy funds.


EDIT: Or I could think smart and just buy the VG fund at Schwab...

 

[OldShooter]

... Question now is, is there anything close to VTABX that Schwab has? ...

Why not just ask at Schwab/nearest branch?

Fido and Schwab will both assign a named rep to customers who have over a certain amount of assets with them. I have a call in to my rep to see what the number is and I'll edit this post when I get it. If you qualify, tell the person you're talking to how much you are moving to them and ask if you can get a dedicated rep assigned. If that's OK, then ask to talk t the branch manager, tell him/her what kind of rep you'd like (sex, experience, interests, etc.) and ask if you can interview a couple of candidates. IMO most of the relationship is not with the house but with the rep. Always check any rep at https://brokercheck.finra.org/.

My rep has never tried to sell me anything. He's not commissioned though he does get spiffs for customer referrals to some Schwab services. He answers questions, helps with administrivia and is generally a nice and helpful guy. IIRC broklercheck says he has about 20 years in the business.

Edit: I just logged on at Schwab and can buy VTABX, no problem.

 

[youbet]

I use a hardware token provided by Schwab, whereas wife uses text to her phone.
.

I use both my smart phone / iPAD and a hardware token to access my Schwab account. Works fine.

 

[youbet]

What kind of interest do you get on your free cash? When I called and asked I was told .1%... There should be a better option IMO...

There is. Use their purchased MMF's.

 

[fisemper]

Why not just ask at Schwab/nearest branch?

Fido and Schwab will both assign a named rep to customers who have over a certain amount of assets with them. I have a call in to my rep to see what the number is and I'll edit this post when I get it. If you qualify, tell the person you're talking to how much you are moving to them and ask if you can get a dedicated rep assigned. If that's OK, then ask to talk t the branch manager, tell him/her what kind of rep you'd like (sex, experience, interests, etc.) and ask if you can interview a couple of candidates. IMO most of the relationship is not with the house but with the rep. Always check any rep at https://brokercheck.finra.org/.

My rep has never tried to sell me anything. He's not commissioned though he does get spiffs for customer referrals to some Schwab services. He answers questions, helps with administrivia and is generally a nice and helpful guy. IIRC broklercheck says he has about 20 years in the business.

Edit: I just logged on at Schwab and can buy VTABX, no problem.

Thanks for the heads up. Since the fee at USAA is a bit less, I'll buy and let the transfer do its thing.

This brings up another question, maybe a new thread. Would it be worth saving the commission fee and going with ETF? I have only briefly looked at the differences and long term "seems" to be the same as far as returns.

 

[Steeler75]

Vanguard is a joke. Web site is way out of date and clunky. They ban the inverse and leveraged ETFs from trades. Get a real broker.

+1

Have accounts at both Fido and Vanguard. Fido’s web site seems far superior to me and easier to use. Plus I can talk to a Fido rep on phone or in person with ease, while Vanguard can take a while to even get a rep on the phone.

Like Vanguard investments but not platform/service.

 

[youbet]

Question now is, is there anything close to VTABX that Schwab has?

Just buy VTABX at Schwab. You'll pay a commission on the purchase but not on future sells. So, if you're going to lump sum a chunk in, the commission will be negligible even if you occasionally sell a bit here and there for living expenses.

Even better, if you're moving some significant funds to Schwab, don't be afraid to negotiate that commission away. I find it easiest to ask my assigned rep for a "consideration" in person at the local branch. I'm frequently successful.

 

[youbet]

This brings up another question, maybe a new thread. Would it be worth saving the commission fee and going with ETF? I have only briefly looked at the differences and long term "seems" to be the same as far as returns.

There are pros and cons to MF's and ETF's. Lately, I've been moving toward ETF's.

I hold a large (to me) position of VTSAX at Schwab. Because I've had it a number of years, there is a significant LTCG, so it would be costly to sell VTSAX and buy VTI from a tax standpoint. Instead, I have the VTSAX divs and CG's paid in cash and then buy VTI with those dollars. And new money is put into VTI.

My point is, try to make up your mind on the MF vs ETF question up front. The one you start with will, hopefully, build up CG's and it'll cost you tax dollars to switch later.

 

[fisemper]

Even better, if you're moving some significant funds to Schwab, don't be afraid to negotiate that commission away. I find it easiest to ask my assigned rep for a "consideration" in person at the local branch. I'm frequently successful.

Excellent advice! I had not thought of that.

I have the VTSAX divs and CG's paid in cash and then buy VTI with those dollars. And new money is put into VTI.

Thanks! Always open to different strategies! I will keep this in mind for sure.

 

[nwsteve]

Especially in taxable accounts, I prefer ETF over Mutual Funds. ETF give you sales/purchase value at any time of the trading day versus after the market close values for MF. MF also tend to make large and some times surprising dividend distributions during last couple weeks of tax years which can materially impact your year end planning, especially if you are "skating" close to the cliff for things like ACA, IRRMA, etc.

 

[OldShooter]

... ETF give you sales/purchase value at any time of the trading day versus after the market close values for MF. ...

My suspicion has always been that ETFs were invented for just this reason -- to suck investors into trading. Trading is how brokers have historically made their money and conventional mutual funds with end-of-day pricing took that steak off their plate. A few hours difference in the purchase or sale price of a mutual fund is completely irrelevant to a long-term investor.

To understand ETFs, you also need to understand the bid/ask spread (which is a small hidden cost) and the role of "authorized participants" (which is a hidden risk that may not be small).

 

[OldShooter]

... I hold a large (to me) position of VTSAX at Schwab. Because I've had it a number of years, there is a significant LTCG, so it would be costly to sell VTSAX and buy VTI from a tax standpoint. Instead, I have the VTSAX divs and CG's paid in cash and then buy VTI with those dollars. And new money is put into VTI. ...

VT (total world stocks) is the ETF flavor of VTWAX. VTI is US only. So is VTI a strategy change or a typo?

 

[Texas Proud]

You're right. There is a better option. Standard sweeps go to Schwab Bank with interest rate at a pittance.

When this policy went into place, I groused to my Schwab guy and he suggested SWVXX. We've been using that ever since though I haven't done any research on alternatives. (https://www.schwab.com/public/schwa...ent/money_markets_funds/purchased_money_funds)

I don't begrudge them the policy; they have to make money somewhere. Other brokerages tout better sweep deals, but they are making their money somewhere too.

Thanks for this info.... but it seems that it is not a sweep account but a MM account you move money in and out of...


From the page: Schwab has eliminated sweep money market funds as a cash feature for most new and existing accounts.




So, not what I would want in a brokerage... BTW, Fidelity does have a MM account with decent rate (low since all rates are down) but another problem that I cannot get over...

 

[OldShooter]

Thanks for this info.... but it seems that it is not a sweep account but a MM account you move money in and out of...

Yes. That's why I said: "Standard sweeps go to Schwab Bank with interest rate at a pittance."

 

[GoodLife59]

After reading through some of the post, I notice vanguard funds keep coming up a lot. Are their funds preferred over another for any particular reason? My account is with USAA and they sold off to Schwab so I have an option to jump that ship if I want. I have about two weeks to do so. I'm thinking of just going with Vanguard. I have also seen their name when looking up funds on other sites. I'm not going to keep many stocks, so if they are more focused on other types of investments I think they may be a good option to look at. Anyone had experience with Schwab and Vanguard? Is there anything I would be missing from Schwab? Thanks in advance.

Vanguard and Fidelity are both good firms. Vanguard invented the index mutual fund concept and the low fee model. We’re currently working with both but will be consolidating to Vanguard later this year.

 

[socca]

They have an affinity for Medallion signature guarantees (MSGs) they can’t get over.

I helped a relative move assets to VG last year, and had to get MSGs at local banks to facilitate the process. It was a PITA, to be sure, but apparently VG believes putting clients through this inconvenience is worth the corresponding reduction in fraud (it's more efficient to stop fraud before it occurs than expend substantial resources dealing with it after it occurs).

The banks seemed a bit paranoid about issuing a MSG because they are 'on-the-hook' in some way if they issue a faulty MSG (this liability is covered by the bank's insurance, though). All of the banks have maximum asset transfer limits for which they're willing to issue a MSG. One bank officer (perhaps naturally high-strung? ) seemed to be VERY stressed out over issuing the MSG I requested. It took a couple of trips to the bank, but I got it done.

 

[a60dan]

I started with Schwab in the 1980s, and have all our IRAs there. I had been paying an advisor, but recently fired him for his firm's very costly trading paractices, which turned the 1 % fees into over 2% after trading fees and fund expenses. Schwab offers a checking account and rebates all ATM fees, as does Fidelity.

My company started 401k at Fidelity, and Fidelity also offers HSA. Schwab and Vanguard don't.

My company also funded a profit sharing plan. In April I took a one-time distribution, at the 12/31/2019 value. All cash. Now I can see what it's invested in.

Because I need a 3rd party to consult with, I rolled the profit sharing to Vanguard and will pay the 0.3% advisor fee. It's back in the market at 50/50, with more international exposure. We debated dollar cost averaging the cash back in over the next year vs investing it all in April. We also debated how much cash to keep on hand to get through this unfolding depression which will drive interest rates negative (in my opinion).

I like our advisor, and am consulting with him as I gradually rebalance the Fidelity 401k and Schwab IRAs. I can always talk to the same person, and he is far more responsive than the former advisor.

When I joined this forum a couple years ago, one opinion I heard was "flee to Vanguard!".

I'm feeling good about it so far.

 

[mickeyd]

USAA mutual funds were sold to Victory.