Author Topic: Does the where matter?  (Read 257 times)

thedigitalone

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Does the where matter?
« on: June 15, 2021, 02:49:14 PM »
This stuff works and it's showing in our taxable account, at what point do you start worrying about a single institutions holding so much of your nest egg?

Say you have $2M invested between taxable and tax sheltered accounts, $1M at Schwab and $1M at Fidelity. Do you consider using more brokerages to spread out the risk, or does that actually increase the risk by having more points of potential failure?

RWD

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Re: Does the where matter?
« Reply #1 on: June 15, 2021, 03:47:56 PM »
You shouldn't be at risk of losing money due to the institution, see:
https://jlcollinsnh.com/2012/09/07/stocks-part-x-what-if-vanguard-gets-nuked/

You may be concerned about temporary service outages that would delay access to your money.

Telecaster

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Re: Does the where matter?
« Reply #2 on: June 15, 2021, 08:23:32 PM »
You may be concerned about temporary service outages that would delay access to your money.

^ That's why I split my investments.  If something bad happens (I dunno what, but something bad) it is possible my money could be locked up in a brokerage for a few days or maybe longer. 

ender

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Re: Does the where matter?
« Reply #3 on: Today at 07:01:17 AM »
Keep in mind depending on why the firm has an outage you may end up with multiple banks having the same outage due to the same underlying causes.

RyanAtTanagra

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Re: Does the where matter?
« Reply #4 on: Today at 10:12:52 AM »
At some point I split my investments into a couple different brokerages, because I got uncomfortable having so much $ in one basket, even if that basket 'doesn't matter' and there are protections.  Having been a target of.... not exactly identify theft, but pissing off the wrong people and having them target me to fuck up my life (thankfully didn't have anything to lose then), having my assets stolen is a concern, so having them spread out a bit just makes me sleep better.  I keep it simple: taxable with one company, tax-advantaged with another.

PDXTabs

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Re: Does the where matter?
« Reply #5 on: Today at 11:36:20 AM »
You may be concerned about temporary service outages that would delay access to your money.

^ That's why I split my investments.  If something bad happens (I dunno what, but something bad) it is possible my money could be locked up in a brokerage for a few days or maybe longer.

Yup, it is a low cost hedge, essentially free other than your time.

Some people go further for a higher cost hedge and keep some money in offshore accounts, but I don't think that is common in the MMM community.