Vanguard Mutual Funds Question
 

I have an account on Firstrade where I do my stocks. They also have Vanguard funds. I'm wondering if I should take some of my money out of my Firstrade account and invest directly with Vanguard...any benefits to this?

Also my plan is to invest and hold the following:

15% in VDMIX
15% in VEIEX
25% in VIVAX
22.5% in VISVX
22.5% in VISGX

What do you think? I'm not afraid to lose some money and I want to be fairly aggressive so is this representative of that?

Re: Vanguard Mutual Funds Question
 

I'd also like to point out that this will all be taxable...(this is not an IRA) so not sure how that applies to the matter.

Re: Vanguard Mutual Funds Question
 

It looks like you might be chasing past performance.

Re: Vanguard Mutual Funds Question
 

My guess is Firstrade probably charges a commission for purchasing Vanguard funds, whereas Vanguard won't. There's one advantage, I guess.

Re: Vanguard Mutual Funds Question
 

Just buy the ETFs at Firstrade instead.

Post the names(not just tickers) of the funds/etfs if you want comments on your allocation.

Re: Vanguard Mutual Funds Question
 

[ QUOTE ]
Just buy the ETFs at Firstrade instead.

Post the names(not just tickers) of the funds/etfs if you want comments on your allocation.

[/ QUOTE ]

Any downside to purchasing the ETF's instead of working directly with Vanguard. I'd have to transfer money out of my Firstrade account into my bank account then work on getting into Vanguard so keep this in mind.

15% in VDMIX (Vanguard Developed Markets Index)
15% in VEIEX (Vanguard Emerging Mkts Stock Idx)
25% in VIVAX (Vanguard Value Index)
22.5% in VISVX (Vanguard Small Cap Value Index)
22.5% in VISGX (Vanguard Small Cap Growth Index)



Zeebo...what do you mean by mean chasing past performance? Any help will be appreciated. My plan for this is just to hang on to it and let it grow...I am able to take some losses/risks so I want to be semi-aggressive with it.

Jake

Re: Vanguard Mutual Funds Question
 

ETF's tend to have even lower fees then vanguard but you pay commissions. If your talking about a large sum of money and very infrequent trading this is probably better (and in your case) easier then going through vanguard directly. If it's not a ton of money you'll save more going through vanguard and paying no commission on their funds.

Also since you say the account is taxable, keep in mind that the value index and small value index are not very tax efficient. When a company gets to expensive, meaning it's price has gone up, vanguard has to sell it incurring a big capital gain to stay in compliance with the index. Value funds in general are much better off in tax sheltered accounts.

Re: Vanguard Mutual Funds Question
 

[ QUOTE ]
[ QUOTE ]
Just buy the ETFs at Firstrade instead.

Post the names(not just tickers) of the funds/etfs if you want comments on your allocation.

[/ QUOTE ]

Any downside to purchasing the ETF's instead of working directly with Vanguard.

[/ QUOTE ]

Just transaction fees... Firstrade is what, $7/trade? If you're investing $7000/fund or more you make up the transaction cost in lower ER in the first year for most funds.

[ QUOTE ]

15% in VDMIX (Vanguard Developed Markets Index)
15% in VEIEX (Vanguard Emerging Mkts Stock Idx)
25% in VIVAX (Vanguard Value Index)
22.5% in VISVX (Vanguard Small Cap Value Index)
22.5% in VISGX (Vanguard Small Cap Growth Index)

[/ QUOTE ]

There is really no reason to hold a Small Growth Index. It is a low return, high risk black hole. Without getting into detail, even the hardcore efficient market hypothesis believers like Fama/French can't figure out why any rational person would own Small Growth.

VDMIX doesn't belong in taxable because it doesn't receive the foreign tax credit... Use VEU + VWO to achieve your desired international split. To get 50:50, you buy $.70 of VWO for every dollar of VEU (VEU is 85% developed, 15% emerging).

I've softened my opinion on Value in taxable--I think it's okay, but it's prudent to use a pure ETF. IWW iShares Russell 3000 Value for large value, IJS iShares S&P SmallCap 600 Value for small value. If you don't want 100% Value for taxable, use a mix of VTI (Vanguard Total Stock Market) and the value ETFs

Re: Vanguard Mutual Funds Question
 

I have a Roth with a large portion in VTSMX. Is that a bad idea? If so, what mix of funds would be better?

Thanks for any help.

Re: Vanguard Mutual Funds Question
 

[ QUOTE ]
I have a Roth with a large portion in VTSMX. Is that a bad idea?

[/ QUOTE ]

It is a great idea. Add VEU (Vanguard All-World Excluding-US) next year so you have international and U.S. coverage.

Re: Vanguard Mutual Funds Question
 

Jeff W,

Thanks for the replies. Assume I have $50,000 to invest that will be taxable. What's a good mix if I want the investment to grow aggressively and can afford to take a large amount of risk.

Jake

Re: Vanguard Mutual Funds Question
 

I think your original plan is fine minus VISGX... just distribute the 22.5% between the other areas and use the ETFs I outlined instead of the funds.

Re: Vanguard Mutual Funds Question
 

[ QUOTE ]
I think your original plan is fine minus VISGX... just distribute the 22.5% between the other areas and use the ETFs I outlined instead of the funds.

[/ QUOTE ]

I don't follow, sorry. If you take away VISGX there are only 4 areas. Do you mean 25% between VDMIX, VEIEX, VIVAX, VISVX? I thought you said VDMIX was a bad idea in a taxable acct?

I am in a similar position as the OP, but I don't have my money anywhere yet. Should I just make a Vanguard acct and put it on there directly or should I use some other brokerage like e-trade? What are the fees like for these funds?

Re: Vanguard Mutual Funds Question
 

Be smart. Interest rates are rising, oil is going through the roof, retail sales are sluggish, threats of global tension, etc., etc.

The stock market could be ready for a severe decline.

Hell, I would be rather have my money in a 5.25% savings account right now.

Re: Vanguard Mutual Funds Question
 

Countrywide has a 5.25% savings rate.

Re: Vanguard Mutual Funds Question
 

If you insist on investing in the stock market, DIVERSIFY.

With your 50,000, invest 12,500 in four different sectors........say financials, retail, oil, and something else. This will curtail your overall risk.

I would also recommend a couple of your stock picks produce a minumum 2.5% dividend yield.

Re: Vanguard Mutual Funds Question
 

So what's the best way to invest 50k long term...I thought index funds were the way to go.

Jeff I'm in the same boat as mdouglass in that I'm a novice and was confused by your last post.

Re: Vanguard Mutual Funds Question
 

Pretty big hijack here, but why is Vanguard so popular for mutual funds? I have a Fidelity account that I am planning on using for mutual funds, but Vanguard seems to be much more popular on these forums. Any specific reason why?

Re: Vanguard Mutual Funds Question
 

[ QUOTE ]
Pretty big hijack here, but why is Vanguard so popular for mutual funds? I have a Fidelity account that I am planning on using for mutual funds, but Vanguard seems to be much more popular on these forums. Any specific reason why?

[/ QUOTE ]


Jeff W's response to a recent post asking the same question:

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Vanguard is the lowest cost provider of index funds and ETFs. They are shareholder-owned. They are excellent index managers and provide alpha (risk-free return) by superior transactional skill.

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Re: Vanguard Mutual Funds Question
 

When I looked up VDMIX, VEIEX, VIVAX and VISVX on E-trade, it gave the same feeds as Vanguard. It also mentioned a transaction fee but I'm not sure how much this is. Does going through Vanguard allow me to sidestep this transaction fee? If I already have money on e-trade should I really worry about it or should I take the money off and put it directly into Vanguard?

Re: Vanguard Mutual Funds Question
 

I currently have money in Vanguard Growth Index Fund Investor Shares (VIGRX) and Vanguard Total International Stock Index Fund (VGTSX). Are there better ones out there if I'm looking for a 3-7 year return?