Vanguard Mutual Funds Question

[PuppyFridayYall]

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?

[PuppyFridayYall]

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.

[captZEEbo]

It looks like you might be chasing past performance.

[Dazarath]

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

[Jeff W]

Just buy the ETFs at Firstrade instead.

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

[PuppyFridayYall]

[ 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

[jut111]

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.

[Jeff W]

[ 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

[Event Duality]

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.

[Jeff W]

[ 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.