vanguard and fidelity

[billy]

I'm looking to open a roth ira and taxable with either Vanguard with VTSAX or Fidelity with FZROX, I have used both brokers in the past.  Fidelity no ER fee seems great, but it seems Vanguard will yield a better return overall/after tax for both roth ira and taxable accounts, when comparing FSTVX as a guesstimation on what FZROX will perform, what do you think?

I do remember when I had a Vanguard account in the beginning of this year it was a little confusing to do buy/sell orders and I thought it was very odd they when looking at performance they don't show returns as a % (I only saw a $ amount market gain) but I heard they updated their website?

[appleshampooid]

If I were starting from scratch right now, I would go with Fidelity given the 0 fee funds. Currently I have enough crap with Vanguard that the zero fee funds aren't enticing enough for me to move anything over.

The 0 fee funds are new enough that some folks are preaching caution, in that you don't know what the performance will be. Technically that is true, as they are tracking a new index and don't have any performance history. But past history isn't an indication of future performance anyway, so IMO the point is moot. Unless you think Fidelity is going to fuck it up somehow, their 0 fee funds will probably perform very similarly to VTSAX/VTIAX, and probably a tiny bit better due to the lack of fees. Just my opinion.

Especially if you have less that $10k lump sum to invest right now, I would tend toward Fidelity even more strongly. Under 10k and you will be paying investor share class fees at Vanguard. And under $3k and you can't get in to anything but target date funds. And under $1k, not even that. This is all for the index mutual funds. You could also go the ETF route at Vanguard, and invest starting at the cost of 1 share. So there's that. Again this comes down a little bit to preference. I like the simplicity of the mutual funds (e.g. no cash drag). YMMV.

Past the fee issue, it is a lot of personal preference. Some find the Fidelity website to be better than the Vanguard website. Personally I hate them both in different ways. Fidelity does have better support hours if you need to call them. This comes up rarely enough for me that I don't care.

[terran]

Vanguard has a patent that lets their mutual funds act more like ETFs. All other mutual funds tend to be a little less tax efficient has they sometimes have to make capital gains distributions. I would (and do) use ITOT and IXUS ETFs in my Fidelity taxable account because they trade commission free and are more tax efficient.

I would make the vanguard/fidelity decision not based on differences in investment options (both have many excellent options) but rather on where you have other accounts. My wife's employer plans and my Solo 401(k) are at fidelity, so that's where where have everything else.

[billy]

Yeah I realize now I prefer Mutual index funds and just pay the nav, by and hold long-term that's why I want to stop investing in M1 Finance and just open up Vanguard or Fidelity.

I was reading Vanguard is more tax-efficient overall and it appears to me it would outperform the Fidelity zero but that's me also making a lot of assumptions since there's no historical data like you said.

[MDM]

The specific day on which you decide to withdraw and spend the investment gains (i.e., day-to-day market volatility even 30 years from now) will likely matter more than the choice of a fund with a 0 ER vs. one with, say, a 0.04% ER.

[billy]

So about the capital gains distribution for the Fidelity zero Index Fund, does that mean you're just paying the tax sooner than later so it's really all the same When comparing Fidelity and Vanguard options at distribution time/when retired and taking money out of taxable account?

[HamsterStache]

I also was planning to open a Roth IRA with Vanguard next year, invested in a Target Date Fund. Eventually as cash flow improves and I am able to max that out, I would probably invest in a VTSAX taxable account also. Now I'm wondering if I should go with Fidelity instead because of the new zero fees as well as the fact that my wife's 403b is managed by Fidelity anyway. We also have a handful of stocks in a Merril Lynch account that we've done nothing with (currently worth under 2K). Advice?

[MDM]

...the fact that my wife's 403b is managed by Fidelity....

That's as good a reason as any to put everything with Fidelity, as any of Fidelity/Schwab/Vanguard can be good.

We also have a handful of stocks in a Merril Lynch account that we've done nothing with (currently worth under 2K). Advice?

Sell 'em all and put the money into your fund of choice.

[HamsterStache]

Sell 'em all and put the money into your fund of choice.

I've thought about it - I know very little about investing and wasn't sure if that was a good idea or not.  6 shares of Disney,4 shares of Microsoft, and 8 shares of Coca Cola.

Also, as I look closer at things, I'm realizing that it looks like the 403b with Fidelity is actually a Vanguard target date fund - I didn't realize that could be a thing, very much a newbie when it comes to all of this, but learning a lot reading through the forums here.

[Radagast]

One thing I dislike about Fido that became very apparent today is that you (or at least I) can only trade with cash already in the account, which I strive to never have. With Vanguard I can just place market orders and transfer over the exact value from my bank after they go through and I know the price. Fidelity says "oh we're sorry we can't let you trade until that hits your account, try again tomorrow." %&#*

[billy]

Good to know thanks.  I'll just go back to Vanguard and open 2 accounts.  I was thinking my roth ira with total market index mutual fund with a 24 year time horizon and my taxable with S&P 500 index mutual fund with a 9.5 years time horizon.

[JumpInTheFIRE]

One thing I dislike about Fido that became very apparent today is that you (or at least I) can only trade with cash already in the account, which I strive to never have. With Vanguard I can just place market orders and transfer over the exact value from my bank after they go through and I know the price. Fidelity says "oh we're sorry we can't let you trade until that hits your account, try again tomorrow." %&#*

That's weird, I have a Fido account and don't have that problem.  I do have to initiate the transfer from my bank before doing the buy, but as soon as I have initiated the transfer I can place an order right away, I don't have to wait for the transfer to complete.  Maybe it's a mutual fund vs. stocks/ETFs thing (I buy mostly funds) or just related to the account balance.  I'm sure the rules for when transfers are available for trade are documented somewhere but I've never seen them.

[pbkmaine]

I like Vanguard’s ownership structure. It is owned by its funds, which are owned by the shareholders. Fidelity is owned by the Johnson family.

[billy]

I get paid multiple times a month, should I invest the money right when I get it or should I wait till a Monday middle of the month (Investopedia recommendation), and do one larger buy order?

[MDM]

I get paid multiple times a month, should I invest the money right when I get it or should I wait till a Monday middle of the month (Investopedia recommendation), and do one larger buy order?

Are you charged anything to make a purchase?

If not, why wait?

If so, note that there are many no-purchase-fee options available at Fidelity/Schwab/Vanguard.

[billy]

Nope, no fee, I'm just doing Vanguard S&P 500 and total market index funds at Vanguard, nothing else.  I was referencing  https://www.investopedia.com/day-trading/best-time-day-week-month-trade-stocks/

[MDM]

Nope, no fee, I'm just doing Vanguard S&P 500 and total market index funds at Vanguard, nothing else.  I was referencing  https://www.investopedia.com/day-trading/best-time-day-week-month-trade-stocks/

That article does start "Unlike traditional investing...."  As you are asking

...should I invest the money...?

it is probably best to disregard that article.

[terran]

One thing I dislike about Fido that became very apparent today is that you (or at least I) can only trade with cash already in the account, which I strive to never have. With Vanguard I can just place market orders and transfer over the exact value from my bank after they go through and I know the price. Fidelity says "oh we're sorry we can't let you trade until that hits your account, try again tomorrow." %&#*

Strange, that hasn't been my experience. Once I initiate a transfer (which I do from the Fidelity end) it lets me buy right away.

[terran]

Nope, no fee, I'm just doing Vanguard S&P 500 and total market index funds at Vanguard, nothing else.  I was referencing  https://www.investopedia.com/day-trading/best-time-day-week-month-trade-stocks/

Why both of those funds? The total market fund is about 80% S&P 500 and 20% the rest of the US market.

[billy]

I was going to do the total market for the Roth IRA with a 24 year time Horizon and my taxable with the S&P 500 with a 10 year time Horizon.

[Radagast]

One thing I dislike about Fido that became very apparent today is that you (or at least I) can only trade with cash already in the account, which I strive to never have. With Vanguard I can just place market orders and transfer over the exact value from my bank after they go through and I know the price. Fidelity says "oh we're sorry we can't let you trade until that hits your account, try again tomorrow." %&#*

That's weird, I have a Fido account and don't have that problem.  I do have to initiate the transfer from my bank before doing the buy, but as soon as I have initiated the transfer I can place an order right away, I don't have to wait for the transfer to complete.  Maybe it's a mutual fund vs. stocks/ETFs thing (I buy mostly funds) or just related to the account balance.  I'm sure the rules for when transfers are available for trade are documented somewhere but I've never seen them.

Strange, that hasn't been my experience. Once I initiate a transfer (which I do from the Fidelity end) it lets me buy right away.

That's what I thought I remembered too. I mean either way you need to have at least enough money there first, unlike Vanguard where you can complete the purchase and then transfer the exact right amount. But today I could not buy at all. Maybe because I did it in the last five minutes of trading?