The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: HairyUpperLip on May 05, 2014, 01:45:42 PM
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Vanguard 500 Index Fund Investor Class (VFINX :NASDAQ)
Hey guys - just learning the ways and had a question...
Should I buy into VFINX shares directly through Vanguard? Or am I better off buying them from my current stock broker situation?
I currently have an IB account and pay only $1 per trade.
What's the pro's or con's of buying them myself? Any advantages to buying them through Vanguard?
I did call Vanguard myself and asked the question and the guy's only response was that it's lower cost then the typical stock brokerage. Which is probably very true, but at a dollar per trade that may not be true for me.
Opinions? Thanks!
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If you buy through Vanguard, there's no fee to buy - linkey (https://personal.vanguard.com/us/funds/snapshot?FundId=0040&FundIntExt=INT#tab=3)
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Through a brokerage you'd have to buy the ETF version; you can't buy VFINX as that refers to the mutual fund. See https://investor.vanguard.com/etf/etf-vs-mutual-fund
Some pluses/minuses not referenced at above link: mutual funds offer lower-cost Admiral Shares with a high enough minimum balance (and if you're on this site, you should eventually be able to sock away $10k). ETFs can be bought and sold at any time with no restrictions. Vanguard fund shares have some restrictions that prevent frequent trading, but a buy-and-hold investor will not be seriously affected by these.
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Plus the lower cost Admiral shares. Not sure if available through broker. (looks like the fixer beat me to it)
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Thanks for the simple answers.
I wonder why the Vanguard rep didn't bother explaining anything properly.... Should I be weary of trusting them then? ...
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Do you mean leery of trusting them? I vote no.
The rep probably didn't really understand what you were asking. Besides, he did answer that the costs are lower buying directly from them, which is true.