Does Fidelity offer the best index products for a passive investor compared to Vanguard

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rkhusky
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Re: Does Fidelity offer the best index products for a passive investor compared to Vanguard

Post by rkhusky »

viz wrote: Mon Oct 15, 2018 11:26 pm
rkhusky wrote: Mon Oct 15, 2018 7:32 pm
ruralavalon wrote: Mon Oct 15, 2018 10:42 am
A $3k initial minimum investment for almost all funds at Vanguard is a significant hurdle for the median U.S. household or individual.
As noted above, the TR funds have a $1000 minimum, which is what beginners should start with anyway.
Why wait till 1k? If I only have 500$ to put in my Roth IRA at age of 20, should I wait another year and not start investing?
If you only have $500, it should be in a checking or savings account, or even a CD. And a one year delay on investing $500 is not going to make an iota of difference in your retirement standard of living.
UpperNwGuy
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Re: Does Fidelity offer the best index products for a passive investor compared to Vanguard

Post by UpperNwGuy »

rkhusky wrote: Mon Oct 15, 2018 7:32 pm
ruralavalon wrote: Mon Oct 15, 2018 10:42 am
A $3k initial minimum investment for almost all funds at Vanguard is a significant hurdle for the median U.S. household or individual.
As noted above, the TR funds have a $1000 minimum, which is what beginners should start with anyway.
I would recommend a beginner start with Total Stock, not with a blended fund.
donaldfair71
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Re: Does Fidelity offer the best index products for a passive investor compared to Vanguard

Post by donaldfair71 »

As my friend Rob Berger on the Dough Roller Podcast would probably say, once you get to this decision (Vanguard vs Fidelity) you've already solved the most important problem regarding costs. Now it doesn't really matter all that much.
mighty72
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Re: Does Fidelity offer the best index products for a passive investor compared to Vanguard

Post by mighty72 »

rkhusky wrote: Tue Oct 16, 2018 6:50 am
viz wrote: Mon Oct 15, 2018 11:26 pm
rkhusky wrote: Mon Oct 15, 2018 7:32 pm
ruralavalon wrote: Mon Oct 15, 2018 10:42 am
A $3k initial minimum investment for almost all funds at Vanguard is a significant hurdle for the median U.S. household or individual.
As noted above, the TR funds have a $1000 minimum, which is what beginners should start with anyway.
Why wait till 1k? If I only have 500$ to put in my Roth IRA at age of 20, should I wait another year and not start investing?
If you only have $500, it should be in a checking or savings account, or even a CD. And a one year delay on investing $500 is not going to make an iota of difference in your retirement standard of living.
I believe, while starting early with a small amount might not make a difference financially directly to my retirement, it is something you don't want to delay for 2 reasons:
1. Establish a good habit early and follows the pay yourself first rule
2. Money in checking and savings have a way of disappearing & it might not be there for a year
I think the benefit of above 2 exceed benefit of investing with Vanguard over fidelity. And if this is in tax sheltered account, you can easily move once you have the minimum required at vanguard. For me those minimum would be till there is enough money to qualify for admiral class
mervinj7
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Re: Does Fidelity offer the best index products for a passive investor compared to Vanguard

Post by mervinj7 »

viz wrote: Mon Oct 15, 2018 11:24 pm
NYCwriter wrote: Mon Oct 15, 2018 11:11 pm
True, but wouldn't the ETF share classes be cheaper and without the minimum?
True but you need $3 to start a 3 fund portfolio at fidelity and you won't find any ETF under 10$. Also with MF you can invest every last cent but not with ETF unless you use something like M1 or betterment. For smaller account even a few dollars can be a chunk of the account.
I made a 3 fund portfolio with just $1.17 total in Fidelity just to show it can be done. It's my only taxable investment account at Fidelity.

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rkhusky
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Re: Does Fidelity offer the best index products for a passive investor compared to Vanguard

Post by rkhusky »

viz wrote: Tue Oct 16, 2018 8:11 am 2. Money in checking and savings have a way of disappearing & it might not be there for a year
If one has trouble with spending, then locking the money in a CD would be useful.

I agree that getting in the habit of saving is important, but jumping into stock investing before you have a good savings habit, and before you understand the risks, may cause problems later.

Rather than the low minimums and er's, I would have new investors look at the Fidelity web site, the availability of brick/mortar locations, and the information infrastructure, versus what Vanguard offers.
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ruralavalon
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Re: Does Fidelity offer the best index products for a passive investor compared to Vanguard

Post by ruralavalon »

viz wrote: Mon Oct 15, 2018 11:26 pm
rkhusky wrote: Mon Oct 15, 2018 7:32 pm
ruralavalon wrote: Mon Oct 15, 2018 10:42 am
A $3k initial minimum investment for almost all funds at Vanguard is a significant hurdle for the median U.S. household or individual.
As noted above, the TR funds have a $1000 minimum, which is what beginners should start with anyway.
Why wait till 1k? If I only have 500$ to put in my Roth IRA at age of 20, should I wait another year and not start investing?
For the beginning investor the most important thing is to begin. That's why I say the zero or $1 initial minimum investment at Fidelity and Schwab is very important for most people.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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BolderBoy
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Re: Does Fidelity offer the best index products for a passive investor compared to Vanguard

Post by BolderBoy »

With Fidelity (a for-profit company) you will constantly have to remain vigilant about the investments you make there (to be sure they are making their profits off other customers and not you). With Vanguard, such vigilance won't be necessary.

So it would seem to me to boil down to how much attention to [changing] details about your portfolio you wish to maintain.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
retiringwhen
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Re: Does Fidelity offer the best index products for a passive investor compared to Vanguard

Post by retiringwhen »

Serious question, does anyone know first hand of a situation where $1,000 to initiate a LONG-TERM savings and investment plan was too big of a leap before opening a brokerage account? If yes, would opening a brokerage account and putting the money in a money market (Vanguard Federal Money Market) via regular auto-deposits would not have been sufficient?

It seems like 99% of potential problem investors could just open a brokerage account at Vanguard, setup auto-deposit into the settlement account for $20-$50 a paycheck until they can buy into a fund. Heck they would be able to start an emergency fund this way too since an emergency fund is usually a PRE-CONDITION to market investing.

I have counselled numerous high-school / college age kids trying to begin savings, and most have something in the bank to start with and frankly need to SAVE more than the need to invest. Investing is step #2.

I am not asking theory, I want a real situation where a serious investor was / is hampered by a $1,000 minimum for investing in a mutual fund. I personally believe this is a non-issue.
UpperNwGuy
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Re: Does Fidelity offer the best index products for a passive investor compared to Vanguard

Post by UpperNwGuy »

retiringwhen wrote: Tue Oct 16, 2018 10:16 pm Serious question, does anyone know first hand of a situation where $1,000 to initiate a LONG-TERM savings and investment plan was too big of a leap before opening a brokerage account? If yes, would opening a brokerage account and putting the money in a money market (Vanguard Federal Money Market) via regular auto-deposits would not have been sufficient?

It seems like 99% of potential problem investors could just open a brokerage account at Vanguard, setup auto-deposit into the settlement account for $20-$50 a paycheck until they can buy into a fund. Heck they would be able to start an emergency fund this way too since an emergency fund is usually a PRE-CONDITION to market investing.

I have counselled numerous high-school / college age kids trying to begin savings, and most have something in the bank to start with and frankly need to SAVE more than the need to invest. Investing is step #2.

I am not asking theory, I want a real situation where a serious investor was / is hampered by a $1,000 minimum for investing in a mutual fund. I personally believe this is a non-issue.
What you are describing is much too complicated for a new investor. And it requires a lot of patience to achieve delayed gratification. New young investors won't do it. They will go instead to Fidelity where they can open an account and invest $50 in Total Stock right away.
UpperNwGuy
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Re: Does Fidelity offer the best index products for a passive investor compared to Vanguard

Post by UpperNwGuy »

BolderBoy wrote: Tue Oct 16, 2018 10:03 pm With Fidelity (a for-profit company) you will constantly have to remain vigilant about the investments you make there (to be sure they are making their profits off other customers and not you). With Vanguard, such vigilance won't be necessary.

So it would seem to me to boil down to how much attention to [changing] details about your portfolio you wish to maintain.
I like dealing with for-profit companies. They are very predictable. I understand their profit motive. All I have to do is make sure that I am getting a good deal. And I love loss leaders.
retiringwhen
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Re: Does Fidelity offer the best index products for a passive investor compared to Vanguard

Post by retiringwhen »

UpperNwGuy wrote: Tue Oct 16, 2018 10:24 pm What you are describing is much too complicated for a new investor. And it requires a lot of patience to achieve delayed gratification. New young investors won't do it. They will go instead to Fidelity where they can open an account and invest $50 in Total Stock right away.
Actual human being that has this problem? If this person exists, I would argue their problem is savings and understanding why, not mechanics. Sending money every two weeks to a financial institution is the very concept of savings and investing. If they can't do that, why are they trying to invest. The most it can be is a lesson/experience as $2.72 or even $272 is not an investment that will make a difference, but $2.72 every two weeks is.

If you want to have a kid feel like they are playing for real, and instant gratification, maybe Peter Lynch's model of buying one share of McDonald's or Toys R US would be a good idea. Oops, that isn't teaching delayed gratification either, in fact they may be pretty unhappy when the value begins to vanish... But in actuality why is it so important to have the money in a total market index fund immediately unless there some sort of experience to be had?

My son when he was twelve was pretty happy to see $0.02 / month added to his savings account for no work (pretty low interest rates you know!) That experience made him understand why putting $1,000 away after his first serious summer job, was worthwhile (now sitting in a Roth IRA in TR Fund at Vanguard, with regular additions as his sporadic work allows.)

He had the $1,000 because he understood savings, the index funds came much later.

I have another son who has $5.82 to his name, he never learned that lesson to his and his father's great chagrin.

Don't loose the forest for the angels dancing on the head of a pin.
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