Author Topic: vanguard etf question, not sure how to buy it  (Read 3922 times)

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vanguard etf question, not sure how to buy it
« on: March 21, 2013, 10:16:47 AM »
Okay, I've been doing some researching, and I've set my mind to buy this etf from vanguard
https://personal.vanguard.com/us/funds/snapshot?FundId=3139&FundIntExt=INT

Anyways, I use Scottrade and I can see it listed with the trade button, so I'm assuming I can buy it. Currently I only want to put in about $3000. Does the 0.12% fee come out of my earnings with this or does my Scottrade account somehow get charged with the maintenance fee? Is there a minimum time I have to hold onto it? I'm looking to hold it for a month or so, just to see if it does okay, then I'd hold longer.

Off topic: And does anyone use vanguard's brokerage? I looked at it and their Voyager service offers $7/trade which is same as Scottrade. If their offering is as good as Scottrade's I see no reason not to use them. Aside from getting $50,000 into the account to make it Voyager. This is about 1-2 years down the line, I don't have $50,000 that I want to park yet. Since I want to keep it liquid at moment for the next year.

the fixer

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Re: vanguard etf question, not sure how to buy it
« Reply #1 on: March 21, 2013, 11:19:59 AM »
Vanguard's brokerage account lets you do commission-free trades of Vanguard ETFs. Outside purchases have a per-trade charge. So if you're going to do a fair amount of Vanguard trading it's a good idea to do it through a Vanguard account to save money. If this is just a one-off small holding, you might be better off keeping all your accounts consolidated in one place at Scottrade.

I don't use ETFs myself but I'm 99% sure the expense ratio on a ETF works just like a mutual fund: it's a disclosed number that slowly eats away at the price of the equity. You will not ever be directly charged that 0.12%, you'll just see your shares worth on average .01% less per month than if Vanguard were somehow able to do it all without having to pay a dime.

And holding an ETF for just one month to "see how it does" isn't going to be very illuminating. This month it could go up 10%, it could go down 40%, but what's important is where it will be 10 years from now which has almost nothing to do with the first month's performance.

rugorak

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Re: vanguard etf question, not sure how to buy it
« Reply #2 on: March 21, 2013, 12:53:06 PM »
Everything the fixer said is right. Also with ETF's keep in mind they trade like stocks. So you have to buy them in whole shares. Especially with the hold length. I'd say increase that to a year.

Here is their fee schedule: https://personal.vanguard.com/us/whatweoffer/stocksbondscds/feescommissions

Your first 25 trades for the year only cost $7 before you hit the $50,000 mark. If you trade more than 25 times a year you may not want to move to them. But if you don't have 50k invested and make more than 25 trades a year it seems to me something is probably out of whack and you are most likely losing money. I subscribe to the same line of thinking as jlcollinsnh myself - http://jlcollinsnh.com/2012/04/15/stocks-part-1-theres-a-major-market-crash-coming-and-dr-lo-cant-save-you/

I use Vanguard and am very happy with them. I'd suggest giving it a serious look. Especially since their fees are lower than everyone else. If you do go with them be sure to elect to receive statements and other important information electronically. It saves you $20 a year.

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Re: vanguard etf question, not sure how to buy it
« Reply #3 on: March 22, 2013, 07:00:57 AM »
I wasnt holding it for a month for the gain, I just wanted to see how it works, fee structure, etc. I don't mind holding it longer, I just figured seeing how it works on a month to month basis would be good to know.

edit:bought my first vanguard etf today :D hope it goes well. looks like I'll join you guys in the long haul
« Last Edit: March 22, 2013, 08:40:07 AM by eyem »