Author Topic: Investment Account Minimums  (Read 1812 times)

wtrfre

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Investment Account Minimums
« on: February 02, 2016, 11:06:36 AM »
I have what may be a silly question.  Investment accounts have buy in minimums, but do they have balance minimums?
If I look at worst case scenarios, does anything happen if you opened an investment account with minimum buy in and then the market tanked taking your balance in half?
What if you had a personal emergency and needed to take a significant liquidation of an account?  Can you keep the account open with balances below the buy in minimum?

GrowingTheGreen

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Re: Investment Account Minimums
« Reply #1 on: February 02, 2016, 12:41:48 PM »
This happened to me in 06-08 when I first started with Vanguard. My account balance dropped several hundred dollars below their minimum. Nothing happened.

If you're that worried about it, you can use TD Ameritrade if you're using ETFs. They have a $0 minimum. If you go this route, PM me--I have a referral code :)

PhysicianOnFIRE

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Re: Investment Account Minimums
« Reply #2 on: February 02, 2016, 09:28:02 PM »
Not a silly question.  Not a simple answer.

I had a Vanguard account and I was invested in admiral shares (which have a higher minimum and lower expense ratio) of a particular bond fund in my Roth IRA.  I exchanged into other funds, leaving the balance below the required $10,000 minimum.  I received a notice to shape up or ship out.  I don't remember which I did, but I took care of it.

Conversely, I opened a Vanguard money market fund ($3,000 minimum) and promptly defunded it to $1.  It exists solely to collect quarterly dividends.  Apparently, they find this behavior perfectly acceptable. 

Long story short, YMMV.

whodidntante

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Re: Investment Account Minimums
« Reply #3 on: February 02, 2016, 10:42:59 PM »
I've been wondering this myself.  I'm holding an emerging market fund that has been doing what emerging market funds do (at least lately).  It's dropped below the minimum initial for the share class by a couple grand.  So far, no strongly worded letters have arrived.  We'll see. 

PhysicianOnFIRE

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Re: Investment Account Minimums
« Reply #4 on: February 03, 2016, 11:17:33 AM »
I've been wondering this myself.  I'm holding an emerging market fund that has been doing what emerging market funds do (at least lately).  It's dropped below the minimum initial for the share class by a couple grand.  So far, no strongly worded letters have arrived.  We'll see.

I was way under and it was due to exchanging into a different fund.  If your account has dipped under the minimum due to market performance, I wouldn't think they would fault you for that. 

Hopefully, we'll see EM bounce back, it's 10% of my portfolio.

seattlecyclone

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Re: Investment Account Minimums
« Reply #5 on: February 03, 2016, 11:22:06 AM »
I think in general Vanguard won't downgrade you because of market movements alone. If you sell some of your shares they'll apparently insist you switch over to the investor shares.