Author Topic: Possibly the dumbest Vanguard question ever asked  (Read 2128 times)

Ceridwen

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Possibly the dumbest Vanguard question ever asked
« on: August 11, 2016, 10:16:49 AM »
DH and I are (finally) about to take the leap into investing.  Could someone please clarify this for me though:

Is there a difference between investing with Vanguard and buying Vanguard stocks?

We've worked out a plan that involves buying VAB, VCN and VXC through our RBC Direct Investing Account (we're in Canada).  Is this ok or should we be working directly with Vanguard?

Kroaler

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Re: Possibly the dumbest Vanguard question ever asked
« Reply #1 on: August 11, 2016, 10:27:10 AM »
I feel dumb for not being able to answer....

CmFtns

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Re: Possibly the dumbest Vanguard question ever asked
« Reply #2 on: August 11, 2016, 10:33:33 AM »
If you buy Vangaurd stocks through an outside broker you will own the same thing but will probably get charged a fee for every trade you make (every time you buy)?

I would open an Vangaurd account and invest directly through them (Does being Canadian prevent you from doing this?) because they charge no fees to invest in their own funds.
« Last Edit: August 11, 2016, 10:36:31 AM by CmFtns »

merula

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Re: Possibly the dumbest Vanguard question ever asked
« Reply #3 on: August 11, 2016, 10:36:12 AM »
I can't answer for Canada, being stateside, but you can't buy "Vanguard stock". Vanguard's own stock is owned by the funds it manages, so Vanguard's customers own Vanguard stock, indirectly.

So, you could invest in Vanguard funds either through Vanguard directly, or through your current account with RBC. I'm assuming that RBC charges either a management fee as a percentage of assets under management, or tacks on a transaction fee to buying the funds. Either way, that'd be more expensive than opening a Vanguard account.

CmFtns

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Re: Possibly the dumbest Vanguard question ever asked
« Reply #4 on: August 11, 2016, 10:37:25 AM »
...you can't buy "Vanguard stock". Vanguard's own stock is owned by the funds it manages, so Vanguard's customers own Vanguard stock, indirectly.
I don't think they meant that they want to buy literally Vangaurd Stock... They want to buy Vangaurd's Exchange Traded Funds

Vangaurd has Exchange Traded Funds
For example: VTI
Vanguard Total Stock Market ETF

This can be bought through any broker


Quote from: https://investor.vanguard.com/etf/
You must buy and sell Vanguard ETF Shares through a broker like Vanguard Brokerage Services (we offer them commission-free) or through another broker (you may incur commissions).

Vanguard Brokerage Services = direct investment
vs
other brokers may also purchase Vangaurd ETFs but may charge trading fees and/or commisions
« Last Edit: August 11, 2016, 10:48:04 AM by CmFtns »

human

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Re: Possibly the dumbest Vanguard question ever asked
« Reply #5 on: August 11, 2016, 11:01:42 AM »
I'm from Canada, Vanguard does not have brokerage accounts in Canada. You have to buy ETFs in Canada (such as VAB, VCN and VXC as you pointed out), Vanguard does not have mutual funds in Canada.

Not a stupid question, as you can see our cousins to the south are spoiled as Vanguard has all kinds of mutual funds there. When people say they are investing in Vanguard they either mean in their mutual funds or ETFs, or their different ownership rules of the company, apparently when you invest in their funds you supposedly become some sort of owner of Vanguard, ignore that it isn't important except that it lowers fees.

You do need a brokerage account (an account to trade stocks) to buy these ETFs. The big banks can open accounts for you. I'm with BMO investorline, I like it because I can make contributions to RRSP and TFSA a lot more easy and transferring funds is easy. It does cost 9.99 per trade.

A lot of people in Canada love Questrade, free to buy ETFs but not free to sell. You should google canadiancouchpotato to read up on asset allocation, they post examples of easy Vanguard 3 fund portfolios. http://canadiancouchpotato.com/model-portfolios-2/

I hope I'm not complicating things, but you could by US listed ETFs if you really wanted to but you should read up on that to figure out if you want to go through that hassle.
« Last Edit: August 11, 2016, 11:04:18 AM by human »

Ceridwen

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Re: Possibly the dumbest Vanguard question ever asked
« Reply #6 on: August 11, 2016, 11:15:33 AM »
Thank you all for this information! This really helps.

I am familiar with Canadian Couch Potato (that is in fact where we got our portfolio plan from).  Between that web site, Vanguard and this one, I couldn't quite understand the difference between buying Vanguard ETFs and investing with them, but I think I understand now.

We will go ahead and buy the Vanguard ETFs through RBC.