Is diversification necessary between no-load fund families

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drbobgleeson
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Is diversification necessary between no-load fund families

Post by drbobgleeson »

Is it safe to keep all of my investested liquid assets in Vanguard, or should I put half in Vanguard and half into Fidelity?

For illustration purposes, let's say that half of my total net worth is in Vanguard, and further that I have adequate income and cash flow to cover.

Yes, I am nicely diversified wtihin Vanguard and rebalance every six months.

thank you.
grberry
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Post by grberry »

I see no reason to diversify between major fund families. Certainly either all Vanguard or all Fidelity would be fine, though I think all Vanguard gives you better choices.
hlfo718
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Post by hlfo718 »

I am not so concerned with the fund company, Vanguard, Fido..., but more concerned with the custodian holding the assets for the funds. Based on what I read in the SAI from one of the Vanguard Funds, I believe most of the assets are with JPMorgan and Brown Brothers.

What if JPM and or BBH becomes Lehman? Are investors protected if the custodian goes belly up?
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Mel Lindauer
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Re: Is diversification necessary between no-load fund famili

Post by Mel Lindauer »

drbobgleeson wrote:Is it safe to keep all of my investested liquid assets in Vanguard, or should I put half in Vanguard and half into Fidelity?

For illustration purposes, let's say that half of my total net worth is in Vanguard, and further that I have adequate income and cash flow to cover.

Yes, I am nicely diversified wtihin Vanguard and rebalance every six months.

thank you.
Here's something I wrote on this subject that may help. http://www.bogleheads.org/wiki/Vanguard_safety
Best Regards - Mel | | Semper Fi
chaz
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Post by chaz »

Vanguard gives you better choices and low ERs.

Good luck.
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page
fishndoc
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Post by fishndoc »

My only concern is to not have all my liquid reserves in one place, where a computer system failure could keep me from accessing my cash in an emergency.
" Successful investing involves doing just a few things right, and avoiding serious mistakes." - J. Bogle
chaz
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Post by chaz »

fishndoc wrote:My only concern is to not have all my liquid reserves in one place, where a computer system failure could keep me from accessing my cash in an emergency.
Keep some emergency funds in a local bank.
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page
normaldude
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Post by normaldude »

I don't think you should put all your money with one firm.

Maybe use Fidelity for US equities (Spartan Total Market Index Fund; expense ratio 0.07% - 0.10%).

And then for everything else (Intl stocks, US bonds, Intl bonds, TIPS bonds), use Vanguard. Vanguard is also probably the best place for your IRA, since they have the lowest expense ratio bond funds.

That way, if there's a massive scandal or disaster with one firm, your money isn't frozen or tied up in litigation for years.
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camper
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Post by camper »

For the sake of some simplicity I try to keep everything at Vanguard. We have a 457 and a 401a/403b away from Vanguard through work so we don't really need the added headache. Vanguard has everything I need, but ISV.
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