Out of the Market during transfer

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Saluki31
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Out of the Market during transfer

Post by Saluki31 » Sat May 22, 2010 10:38 am

Quick summary - my accounts are currently held at Schwab, in high ER mutual funds (some load/some no load). The funds were chosen by my former advisor (I terminated their services after being a client for 6 months). I've done my homework, and am ready to do things on my own. The early redemption fee periods have now passed on some of my funds and I am ready to move to Vanguard.

I'm not sure how comfortable I am with having my funds out of the market for 10-14 days during the transfer process. Given the recent volatility, it would not be surprising to see the market go up or down by 5-10% during a two week period. Obviously, if the market moves substantially downward during that time, I'll be happy I missed that. But if the market has a big rally, I'll be kicking myself for missing out, and then be more nervous of a pending correction. Should I then DCA back in at VG?

The more I think about it, maybe I should just stick with Schwab, and reallocate my portfolio with Schwab index funds. Any advice? The VG funds I'll be investing in are:

Vanguard Total Stock Market VTSMX
Vanguard Small Cap Value Index VISVX
Vanguard FSTE All World ex-US VFWIX
Vanguard FSTE All World ex-US Small Cap VFSVX
Vanguard Total Bond Market VBMFX
Vanguard Inflation Protected VIPSX

Thanks!

GammaPoint
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Post by GammaPoint » Sat May 22, 2010 10:41 am

You can probably transfer Schwab funds to Vanguard "in-kind" and then sell them on the same (or next) day as you buy your Vanguard funds I would guess.

Depending on how much you have, this may not be very expensive to do since Vanguard has lowered their price of trades.

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Post by market timer » Sat May 22, 2010 10:43 am

Looks like you have bonds and stocks. One option would be to transfer the least volatile half (mostly bonds) of your account to VG. Wait until the funds arrive, then buy the most volatile half of your account (stocks) and sell at Schwab simultaneously. Then transfer the second half of your account from Schwab to buy the remainder of your portfolio.

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Saluki31
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Post by Saluki31 » Sat May 22, 2010 10:54 am

GammaPoint wrote:You can probably transfer Schwab funds to Vanguard "in-kind" and then sell them on the same (or next) day as you buy your Vanguard funds I would guess.

Depending on how much you have, this may not be very expensive to do since Vanguard has lowered their price of trades.
I forgot to mention that funds are held in IRA accounts. I asked the VG rep if there was any way to accomplish the transfer faster and was told no, because of IRS requirements. I guess "in-kind" transfers of IRAs are not possible??

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Saluki31
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Post by Saluki31 » Sat May 22, 2010 10:56 am

market timer wrote:Looks like you have bonds and stocks. One option would be to transfer the least volatile half (mostly bonds) of your account to VG. Wait until the funds arrive, then buy the most volatile half of your account (stocks) and sell at Schwab simultaneously. Then transfer the second half of your account from Schwab to buy the remainder of your portfolio.
Unfortunately, my current portfolio is about 90% equity. I'll be moving to a 70/30 stock to bond ratio.

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Post by market timer » Sat May 22, 2010 10:59 am

You should be able to transfer ETFs to Vanguard.

GammaPoint
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Post by GammaPoint » Sat May 22, 2010 11:02 am

Saluki31 wrote:
GammaPoint wrote:You can probably transfer Schwab funds to Vanguard "in-kind" and then sell them on the same (or next) day as you buy your Vanguard funds I would guess.

Depending on how much you have, this may not be very expensive to do since Vanguard has lowered their price of trades.
I forgot to mention that funds are held in IRA accounts. I asked the VG rep if there was any way to accomplish the transfer faster and was told no, because of IRS requirements. I guess "in-kind" transfers of IRAs are not possible??
As long as Vanguard's relationship with Schwab is such that they can hold Schwab funds in Vanguard accounts I think it should be find, but you'll have to ask Vanguard about that.

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Post by White Coat Investor » Sat May 22, 2010 11:03 am

You can also move a little at a time, making sure that the portion moved is equivalent to your bond portfolio, which you would have exchanged elsewhere in the portfolio for stocks.

Or you can just do it and roll the dice.
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Post by GammaPoint » Sat May 22, 2010 11:12 am

Here's a list of the Schwab funds available for hold/buy/sell through Vanguard's brokerage service.

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Saluki31
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Post by Saluki31 » Sat May 22, 2010 11:14 am

I spoke with a VG Voyager rep. You'd think he would have suggested an in-kind transfer if that was possible. I guess I need to talk to him again.

I don't like the idea of rolling the dice, but it may be the best option. Transfering a bit at a time is a good idea. Staying at Schwab is an option too.

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Post by GammaPoint » Sat May 22, 2010 11:17 am

Saluki31 wrote:I spoke with a VG Voyager rep. You'd think he would have suggested an in-kind transfer if that was possible.
One thing that I've learned since becoming a Boglehead is to never rely on the information provided by a Vanguard/WellsTrade/Fidelity/etc. representative. Even when people do know about it, I think a lot of time people think "well this would work for him" rather than really focusing on what would be best - no one cares more about your money than you do.

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Saluki31
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Post by Saluki31 » Sat May 22, 2010 11:19 am

GammaPoint wrote:Here's a list of the Schwab funds available for hold/buy/sell through Vanguard's brokerage service.
Thanks! I guess I need to talk to the VG rep again and see if it is possible for me to reallocate my Schwab accounts using these Schwab funds, then transfer in-kind to VG and then sell and buy VG funds.

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Saluki31
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Post by Saluki31 » Sat May 22, 2010 11:21 am

GammaPoint wrote:
Saluki31 wrote:I spoke with a VG Voyager rep. You'd think he would have suggested an in-kind transfer if that was possible.
One thing that I've learned since becoming a Boglehead is to never rely on the information provided by a Vanguard/WellsTrade/Fidelity/etc. representative. Even when people do know about it, I think a lot of time people think "well this would work for him" rather than really focusing on what would be best - no one cares more about your money than you do.
Good point! Thanks for the advice!

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Post by tfb » Sat May 22, 2010 11:27 am

Saluki31 wrote:I spoke with a VG Voyager rep. You'd think he would have suggested an in-kind transfer if that was possible. I guess I need to talk to him again.
To a Vanguard funds rep, the brokerage option does not exist. If you called the Vanguard brokerage rep, I'm sure he/she will know about in-kind transfers.
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10-14 Days Out?

Post by anthau » Sat May 22, 2010 11:42 am

I recently made a direct transfer from one IRA custodian to another, and in the process, I was out of the market for 2-3 days at most, not 1-2 weeks.

Fwiw.
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livesoft
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Post by livesoft » Sat May 22, 2010 11:44 am

As already mentioned there are many ways to accomplish what you want.

You could buy Vanguard ETFs at Schwab and either leave them there or transfer them in-kind.

You could make 4 different partial transfers.

Since you used plural accounts, you could move one account at a time.

You could do a combination of things. Since you are moving to 30% bonds, you could first move to 30% bonds at Schwab, then move the bonds to Vanguard, then at Vanguard switch the bonds to equities and at the same time at Schwab switch same amount of equities to bonds, then repeat 2 more times.

Or ditch Vanguard and move to Wells Fargo where they know about these things and allow in-kind transfers.

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Post by tetractys » Sat May 22, 2010 12:04 pm

GammaPoint wrote:You can probably transfer Schwab funds to Vanguard "in-kind" and then sell them on the same (or next) day as you buy your Vanguard funds I would guess.

Depending on how much you have, this may not be very expensive to do since Vanguard has lowered their price of trades.
I my experience when transferring to Vanguard in-kind, they've waived commissions to sell the old funds and buy Vanguard funds. Check it out with them to be sure though. At any rate there are several ways to move your account, so carefully research all the cost options on both ends to get the best deal for you. -- Tet
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Post by Jack » Sat May 22, 2010 12:28 pm

You should be out of the market for only 1 or 2 days.

When you fill out your Vanguard transfer request, indicate that the old Schwab funds should be liquidated at transfer. You will still be in the market with your Schwab funds right up until the day of the transfer. At the market close on that day, Schwab will liquidate your funds to cash. On the next day Schwab will transfer the cash to Vanguard using the ACATS electronic transfer system.

You can have the cash deposited into your Vanguard money market fund and then the next day select your new asset allocation. Or you can specify on your Vanguard transfer request the allocation to new Vanguard funds by percentage to each fund and the cash will be immediately invested on transfer.

1. Currently invested in Schwab funds.
2. Schwab liquidates funds to cash at end of day.
3. Next day Schwab electronically transfers funds to Vanguard.
4. Vanguard deposits funds in your money market fund or directly invests in Vanguard funds per your transfer directions.

You are actually out of the market only one or two days. Don't confuse the week or two Schwab requires to get around to processing your transfer request with the actual time it takes to complete the transfer.
Last edited by Jack on Sat May 22, 2010 12:29 pm, edited 1 time in total.

ickeal
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Post by ickeal » Sat May 22, 2010 12:29 pm

It seems this money is for retirement. What is your time horizon?

If you have a long time before retirement then the market going up 10% (over the next 10-14 days) should not bother you. The key is get your asset allocation in order.

I would just transfer all of it and forget about it. Only rebalance or add as needed.

No need to make the situation more complex.

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Post by Saluki31 » Sat May 22, 2010 1:03 pm

The money is for retirement. 20-30 year horizon. I obviously have lots of time to stomach market ups and downs.

The market going up 10% and missing out would cost over $10,000 today, plus compound that over 20-30 years. It would be substantial. I don't want to risk that just because I'm transfering accounts.

I think there must have been some miscommunication when I talked to the VG rep. He said the reason for the long delay is that it will take time for Schwab to "mail" the funds to VG. I'll be calling back on Monday.

Thanks to all for your input. I appreciate the help!

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Post by Jack » Sat May 22, 2010 1:26 pm

Saluki31 wrote:I think there must have been some miscommunication when I talked to the VG rep. He said the reason for the long delay is that it will take time for Schwab to "mail" the funds to VG. I'll be calling back on Monday.
I think you and/or the rep are confusing the time it takes to process the paperwork with the time to make the actual transfer. The rep may have said that it takes two weeks from the time you mail in the transfer request to when the money ends up at Vanguard. That may well be the case. That means it takes time for the paperwork to grind through the gears at Vanguard and then Schwab. But during that time you remain fully invested at Schwab right up to the actual day of the transfer. You are not out of the market. The actual transfer and the time you are out of the market is only one or two days.

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Post by retcaveman » Sat May 22, 2010 1:30 pm

DW and I did this last year end. We were moving an IRA from Schwab to Vanguard. We were required to print off a form and mail it to Vanguard. I think this was a requirement of Schwab ie they wouldn't make the transfer without something in writing.

We put all of our holdings into cash in anticipation of the move. It took about two weeks.

One option we considered was buying Vanguard funds at Schwab (for a fee) and letting them transfer to Vanguard whenever they got around to it. Note: Schwab will also assess you a transfer fee which I think was $50.

Good Luck.
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Post by Jack » Sat May 22, 2010 1:49 pm

retcaveman wrote:We put all of our holdings into cash in anticipation of the move. It took about two weeks.
It is not necessary to cash out funds before the transfer. You can indicate on the Vanguard form to instruct Schwab to liquidate the shares on transfer. Schwab will then automatically cash out the funds on the same day of the transfer so that you remain fully invested.

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Post by Saluki31 » Sat May 22, 2010 2:12 pm

Jack wrote:
Saluki31 wrote:I think there must have been some miscommunication when I talked to the VG rep. He said the reason for the long delay is that it will take time for Schwab to "mail" the funds to VG. I'll be calling back on Monday.
I think you and/or the rep are confusing the time it takes to process the paperwork with the time to make the actual transfer. The rep may have said that it takes two weeks from the time you mail in the transfer request to when the money ends up at Vanguard. That may well be the case. That means it takes time for the paperwork to grind through the gears at Vanguard and then Schwab. But during that time you remain fully invested at Schwab right up to the actual day of the transfer. You are not out of the market. The actual transfer and the time you are out of the market is only one or two days.
I specifically asked "how long will my funds be out of the market". I was told 10-14 days because of the time for paperwork processing on both ends and "mailing" of the funds from Schwab to VG.

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Post by Jack » Sat May 22, 2010 2:29 pm

Saluki31 wrote:
Jack wrote:
Saluki31 wrote:I think there must have been some miscommunication when I talked to the VG rep. He said the reason for the long delay is that it will take time for Schwab to "mail" the funds to VG. I'll be calling back on Monday.
I think you and/or the rep are confusing the time it takes to process the paperwork with the time to make the actual transfer. The rep may have said that it takes two weeks from the time you mail in the transfer request to when the money ends up at Vanguard. That may well be the case. That means it takes time for the paperwork to grind through the gears at Vanguard and then Schwab. But during that time you remain fully invested at Schwab right up to the actual day of the transfer. You are not out of the market. The actual transfer and the time you are out of the market is only one or two days.
I specifically asked "how long will my funds be out of the market". I was told 10-14 days because of the time for paperwork processing on both ends and "mailing" of the funds from Schwab to VG.
The rep is misinformed. Ask again with a different rep. Funds are not mailed. They are transferred electronically over night.

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Re: Out of the Market during transfer

Post by dodonnell » Sat May 22, 2010 3:17 pm

Saluki31 wrote: .. snip ..

funds I'll be investing in are:

Vanguard Total Stock Market VTSMX
Vanguard Small Cap Value Index VISVX
Vanguard FSTE All World ex-US VFWIX
Vanguard FSTE All World ex-US Small Cap VFSVX
Vanguard Total Bond Market VBMFX
Vanguard Inflation Protected VIPSX

Thanks!
Roughly, how much capital is in the IRA? The answer may indicate your best option would be to buy Vanguard ETFs (with much lower expense ratios) within your Schwab IRA brokerage account.

VTSMX = VTI (0.18% vs 0.07%)
VISVX = VBR (0.28% vs 0.14%)
VFWIX = VEU (0.40% vs 0.25%)
VFSVX = VSS (0.63% vs 0.40%)
VBMFX = BND (0.22% vs 0.12%)
VIPSX ~ TIPS (ishares) (0.25% vs 0.20%)


... in some cases the expense ratios on the ETFs are less than HALF the mutual funds.

I don't use Schwab, but within and IRA, you should be able to liquidate a mutual fund at 4:15pm and purchase the ETF at 9:30am the next day for each ETF.

Vanguard Brokerage will WAIT 3 business days settlement on the Mutual Funds and then free the proceeds up for their brokerage account for purchase. IMHO Vanguard Brokerage should be avoided.

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Re: Out of the Market during transfer

Post by Jack » Sat May 22, 2010 3:39 pm

dodonnell wrote:Vanguard Brokerage will WAIT 3 business days settlement on the Mutual Funds and then free the proceeds up for their brokerage account for purchase. IMHO Vanguard Brokerage should be avoided.
This is incorrect. Mutual funds settle in one day (over night) and are available for investing in the brokerage the day after the sale.

You may be thinking of the reverse direction in which ETFs are sold in the brokerage and then you want to purchase Vanguard mutual funds. That takes three days.

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Post by Saluki31 » Sat May 22, 2010 4:28 pm

Jack wrote: The rep is misinformed. Ask again with a different rep. Funds are not mailed. They are transferred electronically over night.
I was assigned a "personal rep" who I can talk to each time I call. I guess I'll have to ask for a new one.

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Re: Out of the Market during transfer

Post by dodonnell » Sat May 22, 2010 5:56 pm

Jack wrote:This is incorrect. Mutual funds settle in one day (over night) and are available for investing in the brokerage the day after the sale.

You may be thinking of the reverse direction in which ETFs are sold in the brokerage and then you want to purchase Vanguard mutual funds. That takes three days.
Ouch.

I should have been more clear.

OP is holding High ER Mutual Funds in his Schwab account, which is anIRA (cash not margin) brokerage account. If OP ACATS transfers Schwab IRA to Vanguard Brokerage using the simple interface from the brokerage menu in the Vanguard on-line website. His High ER Mutual Funds will transfer to Vanguard Brokerage. Simple. And he will never be out of the market.

However, when he sells the non-Vanguard high ER Mutual funds. He then must wait 3 trading days for Vanguard Brokerage to free up (T+3) the proceeds for purchase of Vanguard Mutual Funds.

If moves to ETFs in the Schwab account, he won't.

(disclaimer: my Vanguard Brokerage IRA settlement information on non-Vanguard mutual funds has last been verified 1 year ago. So, unless something has changed since?)

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Post by celia » Sat May 22, 2010 7:12 pm

If it were me, I'd just hang where you are now until things settle down. (That's what I've been doing since mid 2008.)

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Re: Out of the Market during transfer

Post by Jack » Sat May 22, 2010 7:28 pm

dodonnell wrote: OP is holding High ER Mutual Funds in his Schwab account, which is anIRA (cash not margin) brokerage account. If OP ACATS transfers Schwab IRA to Vanguard Brokerage using the simple interface from the brokerage menu in the Vanguard on-line website. His High ER Mutual Funds will transfer to Vanguard Brokerage. Simple. And he will never be out of the market.

However, when he sells the non-Vanguard high ER Mutual funds. He then must wait 3 trading days for Vanguard Brokerage to free up (T+3) the proceeds for purchase of Vanguard Mutual Funds.

If moves to ETFs in the Schwab account, he won't.
He wants to invest in the Vanguard's regular mutual funds. He doesn't have to involve Vanguard brokerage at all. He can have Schwab liquidate the funds at Schwab and then transfer directly into Vanguard mutual funds the next day.

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Re: Out of the Market during transfer

Post by dodonnell » Sat May 22, 2010 7:39 pm

Jack wrote: He wants to invest in the Vanguard's regular mutual funds. He doesn't have to involve Vanguard brokerage at all. He can have Schwab liquidate the funds at Schwab and then transfer directly into Vanguard mutual funds the next day.
Yes, Schwab offers almost all Vanguard funds including VIPSX. This appears to be the simplest solution, although it will incur fees.

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Re: Out of the Market during transfer

Post by Jack » Sat May 22, 2010 7:44 pm

dodonnell wrote:
Jack wrote: He wants to invest in the Vanguard's regular mutual funds. He doesn't have to involve Vanguard brokerage at all. He can have Schwab liquidate the funds at Schwab and then transfer directly into Vanguard mutual funds the next day.
Yes, Schwab offers almost all Vanguard funds including VIPSX. This appears to be the simplest solution, although it will incur fees.
Sorry, I meant he can transfer custody to Vanguard and buy mutual funds at Vanguard the next day. When he transfers to Vanguard, he doesn't have to go through the brokerage. He can transfer directly into the funds.

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Post by Saluki31 » Sat May 22, 2010 8:27 pm

I was planning to use VG mutual funds only, but I may use ETF's as well. Since they eliminated the trading fees, I might use the ETF versions of the FTSE funds to avoid the purchase fee the fund versions.

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Post by Saluki31 » Thu May 27, 2010 1:04 pm

Well, I've spoken with a new VG rep a few times. The new rep also says that a regular (not in-kind) transfer from Schwab will be sent by mailed check. I expressed my surprise that Schwab would not transmit the funds electronically, but the rep indicated that this would be the case.

So it was looking like an in-kind transfer would be a better option. I currently have 13 funds in my main Schwab account. One fund can't be transferred to VG at all, and 3 others would incur trading fees to sell once at Vanguard. So to avoid this, I would have to sell the current funds at Schwab, buy Schwab index funds and then do the transfer. All of this seems like more headache than should be required.

I decided to contact Schwab to find out how a transfer would be done, and what do you know, all transfers are indeed done electronically. I've been less than impressed with Vanguard customer service thus far. I've contacted Schwab customer service a number of times over the last few weeks and have been very impressed with their promptness and assistance, especially since they know I'm planning to move to Vanguard. I hope my customer service experience is not a prelude of a poor experience to come with Vanguard.

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wander
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Post by wander » Thu May 27, 2010 2:08 pm

Schwab has a good range of index funds and ETF with low ER. Bond funds can not compete with VG though. If you only invest in index funds and ETF, you are doing just fine with Schwab's funds and ETFs. Moving asset to VG is not always better, personally, I think free trades at Wells Fargo are better.
If this is your taxable account, bond funds are not recommended.

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Saluki31
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Post by Saluki31 » Thu May 27, 2010 8:06 pm

I like Vanguard's international funds better (VFWIX and VFSVX). That's the tipping point for me in choosing Vanguard over Schwab.

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Post by e5116 » Thu May 27, 2010 8:48 pm

Saluki31 wrote:I like Vanguard's international funds better (VFWIX and VFSVX). That's the tipping point for me in choosing Vanguard over Schwab.
I agree that Vanguard's international funds are a bit better since they include emerging markets, but you can really create a great low-cost diversified portfolio at Schwab quite easily (except the bond fund part takes more creativity). If you are decided that you're going to transfer to Vanguard already, go for it, as Vanguard is great too. I personally use both with most of my assets at Vanguard, but I do like Schwab's interface/research/banking/customer service more than Vanguard's, while I generally prefer Vanguard's mutual fund offerings.

But just for comparison sake, there are some good Schwab alternatives to the Vang funds you mentioned.

Let's compare:

Vanguard Total Stock Market VTSMX (MSCI US Broad Market index, ER=0.18%)
vs. Schwab Total Stock Market SWTSX (Dow Jones U.S. Total Stock Market index, ER = 0.09%)

Vanguard Small Cap Value Index VISVX (0.28%)
No good small cap value fund at Schwab, but there is Schwab Small Cap Index SWSSX (0.19%)

Vanguard FSTE All World ex-US VFWIX (0.40%)
vs. Schwab International Index SWISX (0.19%)
I realize Schwab's fund is just developed markets, but you can easily add SCHE Schwab Emerging Market ETF (0.35%) at your desired weight. I like dividing it between developed/emerging anyways, so it's not a big deal for me, but perhaps you like one fund.

Vanguard FSTE All World ex-US Small Cap VFSVX (ER = 0.63%, purchase fee = 0.75%, redemption fee = 0.75%)
No mutual fund, but Schwab International Small-Cap Equity ETF (0.35%, no purchase or redemption fee). Again, the Schwab version doesn't include emerging markets, but assuming foreign small cap is 5-10% of your total portfolio, the market weight of small-cap emerging is like 1-2% of total portfolio, so won't make much of a difference. And the Schwab fund is a lot cheaper.

Vanguard Total Bond Market VBMFX (0.22%)
vs. RidgeWorth Intermediate Bond I SAMIX (0.32%)
This is where Vanguard certainly outshines Schwab. Schwab's own bond fund (SWLBX) charges 0.55%, but it does offer a good fund (SAMIX) without any transaction charges that holds $1.5B+ in assets at a reasonable expense ratio. VBMFX and SAMIX certainly are NOT identical funds and SAMIX holds more corporates, but you certainly could do much worse than SAMIX, in my opinion.

Vanguard Inflation Protected VIPSX (0.25%)
vs. ACITX (0.49%) or SWRSX (0.5%)
Again, Vanguard wins here in the bond fund battle, but most likely it's a small portion of your assets.

Overall, you can certainly build a good portfolio using Schwab. In fact, Schwab's equity funds are typically cheaper than Vanguard's. And considering you're going to be 70/30 equity/bond, your portfolio with Schwab will probably be slightly cheaper.

Again, moving to Vanguard certainly isn't a bad idea, but you can easily have a diversified, low-cost portfolio at Schwab as well. I realize some Bogleheads think Vanguard is the only place where it's at, but you can also be a Boglehead at Schwab if you want. Just get out of those high cost funds! Again, I have accounts at both and see strengths/weaknesses with both. Overall, though, I've been very satisfied with both firms, so you really can't go wrong.

Good luck!

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Post by wander » Thu May 27, 2010 8:50 pm

Saluki31 wrote:I like Vanguard's international funds better (VFWIX and VFSVX). That's the tipping point for me in choosing Vanguard over Schwab.
It's your money and you do whatever is fine. I do not like VG to charge .75% to buy or sell VFSVX regardless of how long you hold it.
Think about it, if you buy $100k today, you will spend $750 fee, and next month you want to sell it for TLH, you will lose another 0.75%. Yeah, it pays back into the fund, but it rips from you.

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Post by GammaPoint » Thu May 27, 2010 9:03 pm

wander wrote:
Saluki31 wrote:I like Vanguard's international funds better (VFWIX and VFSVX). That's the tipping point for me in choosing Vanguard over Schwab.
It's your money and you do whatever is fine. I do not like VG to charge .75% to buy or sell VFSVX regardless of how long you hold it.
Think about it, if you buy $100k today, you will spend $750 fee, and next month you want to sell it for TLH, you will lose another 0.75%. Yeah, it pays back into the fund, but it rips from you.
That's why a lot of us just buy the ETF VSS. Free to purchase at Vanguard.

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Post by Saluki31 » Thu May 27, 2010 9:14 pm

I guess I need to look at the ETF versions of the International funds at VG. I don't really know much about ETF's - I have no idea what a bid/ask spread is?? I guess I need to learn. No reason to pay more in expenses when you don't have to.

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Post by GammaPoint » Thu May 27, 2010 9:33 pm

Saluki31 wrote:I guess I need to look at the ETF versions of the International funds at VG. I don't really know much about ETF's - I have no idea what a bid/ask spread is?? I guess I need to learn. No reason to pay more in expenses when you don't have to.
Spend some time reading about them. That way you can tell if they're right for you. Ferri's ETF book is pretty good, but a lot of it is just talking about how indexes are constructed. I'd use Google and see what you can learn that way first.

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Post by Saluki31 » Thu May 27, 2010 9:44 pm

I will definitely do some research, although, in the end I may just decide that I'm more comfortable buying the fund versions, even with the added cost. We'll see.

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Post by Saluki31 » Thu May 27, 2010 9:55 pm

wander wrote:
Saluki31 wrote:I like Vanguard's international funds better (VFWIX and VFSVX). That's the tipping point for me in choosing Vanguard over Schwab.
It's your money and you do whatever is fine. I do not like VG to charge .75% to buy or sell VFSVX regardless of how long you hold it.
Think about it, if you buy $100k today, you will spend $750 fee, and next month you want to sell it for TLH, you will lose another 0.75%. Yeah, it pays back into the fund, but it rips from you.
Actually, isn't the fee .25%? Still, it's something to consider.

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Post by tfb » Thu May 27, 2010 10:01 pm

Saluki31 wrote:
wander wrote:
Saluki31 wrote:I like Vanguard's international funds better (VFWIX and VFSVX). That's the tipping point for me in choosing Vanguard over Schwab.
It's your money and you do whatever is fine. I do not like VG to charge .75% to buy or sell VFSVX regardless of how long you hold it.
Think about it, if you buy $100k today, you will spend $750 fee, and next month you want to sell it for TLH, you will lose another 0.75%. Yeah, it pays back into the fund, but it rips from you.
Actually, isn't the fee .25%? Still, it's something to consider.
It's .75% for Vanguard FTSE All-World ex-US Small-Cap Index Fund Investor Shares VFSVX.

https://personal.vanguard.com/us/funds/ ... st=tab%3A3
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Post by dave.d » Thu May 27, 2010 10:29 pm

Gammapoint --

Thanks for posting the list of Schwab funds that can be held at Vanguard. I had not realized it was possible to hold any Schwab funds at Vanguard. I may use this to get to the Schwab international fundamental-weight funds, which I find are an easy and reasonably cheap way to get international small & value exposure. I had thought I had to transfer money to Schwab to do that.

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Post by Default User BR » Fri May 28, 2010 11:44 am

Saluki31 wrote:I guess I need to look at the ETF versions of the International funds at VG. I don't really know much about ETF's - I have no idea what a bid/ask spread is?? I guess I need to learn. No reason to pay more in expenses when you don't have to.
The Wiki page isn't a bad place to start: http://www.bogleheads.org/wiki/ETF



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Post by rustymutt » Fri May 28, 2010 1:30 pm

Tough choices to make. One might also be glad they were not in the market for 14 days past. Is Schwab not as cheap as Vanguard?
I'm not sure that I would cash in at Schwab and move to Vanguard.
I currently own two Schwab ETF's through Vanguard brokerage.
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Post by abuss368 » Fri May 28, 2010 2:35 pm

10 -14 days is a very small timeframe and should not have much impact, if any to your portfolio.

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Post by Saluki31 » Fri May 28, 2010 4:23 pm

abuss368 wrote:10 -14 days is a very small timeframe and should not have much impact, if any to your portfolio.
I disagree. If the market were to go up 10% over a 14 day timeframe (certainly unlikely, but possible), I'd be looking at missing out on a gain of around $10,000. Then compound that over 30 years and the impact is even greater. If you were to say I'll charge you $10,000 (or even $1,000) to move assets, you'd say that's crazy.

Obvioulsy, the market could also go down 10% over that time, and I would avoid losing that $10,000. The point is, I don't want to market time. That's why I don't want to have to pick a 10-14 day window when I think the market won't go up to move my money.

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