Investment company Vanguard

[Dave Bonde]

Anybody use Vanguard.com for investments? I am looking to start a Roth IRA and was not thrilled with the cost using a local investment company and looking at the numbers and information about Vanguard it looks promising. Dave

[Larry Whitlow]

I have used Vanguard for years and would not hesitate to recommend them. The web site is pretty good, but give them a call if you have questions.

Take care.

Larry

[Gary Hodgin]

My wife and I have had Roth IRAs at Vanguard for years. I retired about a year ago and still have my 403(b) in my employer's retirement plan. I have the paper work and plan to transfer it to Vanguard soon. Vanguard has relatively low expense ratios on all its accounts although there are other financial companies that offer low expense accounts today as well. The people at Vanguard are very helpful.

Vanguard might not for everyone. I'm very much an "index" investor. My funds are in Vanguard"s total stock market index, global stock market index, an index that's about 50 percent stocks and bonds, and an index of dividend stocks.

I also have a little money in a couple of Vanguard's ETFs along with some stocks in a T.D. Ameritrade account. The ETF's have even lower expense ratios than the mutual funds.

[David Weaver]

My wife and I have had our investments in a roth at vanguard for years. Been very pleased. As gary alludes, I'd fit in the index investor category.

[Joe Angrisani]

If you're mainly looking at Index Funds, I'd suggest using index ETFs in a simple account you manage yourself (via TD Ameritrade, E-Trade, Scottrade, etc). The index ETFs trade just like shares, and move in lock-step with their related index. 'SPY' shares track the S&P 500, 'DIA' shares track the blue chip DOW Industrials, 'QQQ' shares do the NASDAQ, 'IWM' shares track the small-cap Russell 2000, 'GLD' tracks gold bullion. There are many more.

Unlike index mutual funds, ETF shares can be traded mid-day.

But there's no real reason to give your money to a brokerage house if you're only trading indices.

[David Weaver]

It would be a mistake for the average investor to think that they can time trades intraday and gain in the long term from it. Especially if they are starting with IRA values that don't meet a lot of other providers minimum requirement to waive low account fees.

[Michael Weber]

My company plan and my personal Roth's and personal savings are all with Vanguard and have been for 30 years. I would recommend them to anyone. Their costs are very low if not the lowest and they are a very conservative company. Excellent website that's easy to do most everything you will need or want to do. Their phone service is excellent as well. Very knowledgeable associates and they offer a wide variety of investment options. They do have a pretty restrictive exchange policy but that's to keep costs low for everyone.

[David G Baker]

I have invested in Vanguard for around 12 years. I rolled my 401K into 7 Vanguard funds under one IRA and I have been very happy with them. I lost some money back during the crash but it was earnings and none of my original investment dollars. The Vanguard is supposed to be the company that charges the least amount of fees and doesn't have hidden fees like many other firms.

[charlie knighton]

good company, when plant closed, had 401 with them, just moved it over to ira with them, depending on your age on what type of account you would want, but they have many

[Joe Angrisani]

It would be a mistake for the average investor to think that they can time trades intraday and gain in the long term from it. Especially if they are starting with IRA values that don't meet a lot of other providers minimum requirement to waive low account fees.

HUH???? The average investor needs to educate themselves. Not blindly believe some Big Name can somehow do better than themselves with index investments.

It's a mistake to give your money to a brokerage firm if you don't already understand what's happening. And I don't know the numbers, but I'm sure you can start a TD Ameritrade retirement account with any dollar amount, and buy anything from one ETF share on up.

My point about buying and selling during the trading day has little to do with timing trades, and much more to do with that fact you have to commit to the purchase or sale of mutual funds ahead of time, and the sale is only settled after the market closes. Market surges and gains 150 points in the last hour of trading? Too bad. You're still buying at that high price because you told Vanguard to buy in at 11am when things were down 50 points.

And a brokerage firm isn't going to wait for a pullback to buy in with your money. They're just going to buy in on the day you decide to allocate the money. The simple act of waiting a day or three for a normal market pullback can instantly net you another 1 or 2 percent on your periodic contributions. Manage your own money, folks. Index investing is not rocket science.

I've got nothing against Vanguard. They're certainly top shelf. But you don't go to a brokerage house for index trading. You go to a brokerage house for their trading experience, knowledge and expertise in specialized funds. You go there because of the specific manager's track record. And you go there when that expertise will offset the additional costs. Paying Vanguard to hold your index fund dollars is an unnecessary waste. Do that part yourself.

[Ken Fitzgerald]

Joe,

Some investors like myself don't have the interest to get involved with the details of investing. I would rather pay someone else to take care of it. It's not my cup of tea.

[David Weaver]

Joe, you don't have any better than 50/50 odds of guessing which way the index is going to go before the market closes, and in the long term it makes no difference if you're selling at the close price or at an active market price.

85% or more of return for an individual is driven by allocation, not timing. I would venture to guess that most people lose a lot of money because they don't want to do the legwork to understand what the allocation would be that lines up with their personal risk tolerances or return needs.

If you manage to understand allocation and minimize expenses, you will match any investor's chances for return. The rest of the items that provide additional return or perceived additional return are at the expense of more risk.

Comparing ETFs to vanguard's index funds is a wash. The expense ratios are about the same.

I don't know if you're confusing vanguard with a broker, I don't know anyone who uses vanguard to do anything other than buy and sell funds that have a very low expense ratio (i.e., you direct the trades, not a broker).

The idea of timing a pullback is also a myth, or active funds would be able to beat passive funds on a net return basis, and i haven't seen before where they do unless they are choosing a benchmark that is a favorable comparison. You have to have money on the sidelines giving up potential returns even to do that.

The only way to beat the passive market in the long term is to have inside information. I still haven't seen anything that suggests otherwise, especially net of fees.

[Joe Angrisani]

David....

Yes, I guess I'm confusing Vanguard and thinking they're more of a full-service broker. I agree with you completely, except regarding index investing.

Active funds are too big to make moves that don't affect the system. They can't dump 700,000 shares the way you and I can dump 700. As an individual, we can all do better within that greater motion. Just a matter of how much time you want to put into it, as I see it.

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Ken....

You're talking about overall investment strategies. I'm refering to the portion allocated to index-matching. Nothing's more hands-off than index investing.

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Back to the OP's post...

He spoke about Vanguard in general and not about index funds. My comments were more to the follow-ups about using any "Vanguard" for index funds. I think Dave may have been asking more about the active funds at Vanguard. And that comes down to the performance and track record of the individual Fund Managers, not some magic wand in the board room.

[David Weaver]

Just a matter of how much time you want to put into it, as I see it.

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That it is. If it's a hobby, then that time is enjoyable. If it's not, then it may not be.

[Stephen Cherry]

Investments I'm investing in scrap iron and aluminum. You should see my garage and basement