Author Topic: Dumb Vanguard Question  (Read 703 times)

frugalfoothills

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Dumb Vanguard Question
« on: March 13, 2020, 06:38:22 AM »
I opened a Roth IRA this week. Plan was to open closer to summer but I couldn’t help wanting to get in there now with the market behaving the way it is.

I do not understand what I’m supposed to do now. I only contributed $500 but Vangard never asked me to choose a fund. When I visit my home page the $500 has remained unchanged so doesn’t seem to be reacting to the market at all. When I visit the “dashboard” it seems this money is in the Vanguard Federal Money Market Fund.

What am I missing here? Am I even invested at this point? Why hasn’t the $500 dropped with the market? Should I be picking a different fund? I don’t think I was asked to choose a fund, I think this was automatically chosen for me.

kingxiaodi

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Re: Dumb Vanguard Question
« Reply #1 on: March 13, 2020, 06:50:43 AM »
I opened a Roth IRA this week. Plan was to open closer to summer but I couldn’t help wanting to get in there now with the market behaving the way it is.

I do not understand what I’m supposed to do now. I only contributed $500 but Vangard never asked me to choose a fund. When I visit my home page the $500 has remained unchanged so doesn’t seem to be reacting to the market at all. When I visit the “dashboard” it seems this money is in the Vanguard Federal Money Market Fund.

What am I missing here? Am I even invested at this point? Why hasn’t the $500 dropped with the market? Should I be picking a different fund? I don’t think I was asked to choose a fund, I think this was automatically chosen for me.

I beleive VFMMF is the default fund for Vanguard accounts. I believe they call it a settlement fund. All contributions and any dividends you choose not to automatically re-invent go there. It's probably not the fund you want to be in.

This page should have more information on how to select your own fund when adding money to your IRA. For the $500 you've already invested, you should be able to navigate to "Balances and Holdings," scroll to the section for your Roth IRA, and find an option for "Buy/Sell." I'm doing this from memory, so it might not be exactly like that. Looks like there are instructions on how to do this selling here (specifically under Trading --> Vanguard mutual funds --> How to get here).

If interested, you could also set up an option to automatically fund your IRA and purchase the fund of your choice (see here).

zolotiyeruki

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Re: Dumb Vanguard Question
« Reply #2 on: March 13, 2020, 10:22:18 AM »
Under the title of the account (in my case, it's "Your Name - Roth IRA Brokerage Account", there's a link that says "Buy and Sell".  Select "Buy Vanguard Funds" from the drop-down.  That will take you to a page where you can "Add another Vanguard mutual fund" (or something similar). From there, it should walk you through the process of purchasing shares in a Vanguard fund from the money in your settlement fund.

frugalfoothills

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Re: Dumb Vanguard Question
« Reply #3 on: March 13, 2020, 10:27:48 AM »
Thanks!! It seems most funds to choose from have a minimum fund amount of $3,000 so I won’t be able to buy until I have $3k in the settlement fund? That’s a bummer. I want to take advantage of the drop but didn’t really want to shove $3k of cash there at the moment since things look a little uncertain...

ChickenStash

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Re: Dumb Vanguard Question
« Reply #4 on: March 13, 2020, 10:34:59 AM »
There's a few that are $1k, the Start fund is one I recall from memory.

You could also invest in the ETF version of their funds a those don't have minimums.

terran

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Re: Dumb Vanguard Question
« Reply #5 on: March 13, 2020, 09:52:04 PM »
The target date funds have a $1000 minimum, so if you can throw another $500 in there go with that. If not then the only minimum with ETFs is the cost of one share.

GreenToTheCore

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Re: Dumb Vanguard Question
« Reply #6 on: March 15, 2020, 10:17:54 PM »
FYI: Their live phone help is fantastic. It's not some outsourced call center, it's actual Vanguard employees with finance backgrounds.

frugalfoothills

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Re: Dumb Vanguard Question
« Reply #7 on: March 16, 2020, 09:44:56 AM »
Thanks for the help, everyone! I dumped another $500 in and picked the STAR fund ($1k fund minimum).