Recommendations for other low expense quality companies

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jart1217
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Recommendations for other low expense quality companies

Post by jart1217 » Sun Jun 03, 2007 7:47 am

I am considering spreading my portfolio among two different companies in the event something (I don't know what) happens to my account at Vanguard. Just wondered if others felt the need to spread their portfolios between companies and what companies would you recommend?

livesoft
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Post by livesoft » Sun Jun 03, 2007 7:51 am

While I do not agree with your premise, you can spread things around by purchasing exchanged-traded funds instead of open-ended mutual funds.

For buying ETFs, I like to use the WellsFargo brokerage because if you have $25K with them (and a PMA account), the commissions are free.

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White Coat Investor
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Re: Recommendations for other low expense quality companies

Post by White Coat Investor » Sun Jun 03, 2007 7:58 am

jart1217 wrote:I am considering spreading my portfolio among two different companies in the event something (I don't know what) happens to my account at Vanguard. Just wondered if others felt the need to spread their portfolios between companies and what companies would you recommend?
I also don't feel a need to do this, but if I did, I think the best way would be to take advantage of Fidelity's Spartan index funds. Bridgeway, Dodge and Cox, Southeastern, TIAA-CREF and T. Rowe Price are also considered good fund companies.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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4th&Goal
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Post by 4th&Goal » Sun Jun 03, 2007 8:14 am

I agree with emergdoc, you can't go wrong with the Fidelity Spartan Index funds. If you have the opportunity to invest with TIAA-CREF, be sure to take a look at their Real Estate Account.
"I advise you to go on living solely to enrage those who are paying your annuities. It is the only pleasure I have left." | (Voltaire)

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Sally
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Same Approach

Post by Sally » Sun Jun 03, 2007 9:07 am

I am with you. I just couldn't bring myself to put all of my funds (and long term financial security) in any one company b/c who knows what can happen even if they are a great, honest company today...in 30 years??? I am not a professional so maybe it reflects a slight lack of confidence and basic fear that I do not know enough but.... :lol: )

My solutions was to branch out from Dodge & Cox to Vanguard. I also have TSP and one USAA fund. I am staying the course THANKS to the feedback on a different question that I posted a few days ago when an FA had recommended that I sell everything and replace with just DFA funds and a VG ETF.

It may or may not be rational to spread around in 3 places (4 if you count USAA where the only thing I have is a USAA Bond fund) but it certainly lets me sleep soundly (except when FAs rattle me that I have erred with the the funds/family that I have selected and am going in the wrong direction totally! :P )

I am sticking with my TSP (a small part of my portfolio) along with Dodge & Cox (the majority) and VG (2nd largest portion of my portfolio).

Sally

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jart1217
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Post by jart1217 » Sun Jun 03, 2007 9:31 am

Thanks for the feedback. With the internet and the possibility of internet fraud, I just wondered if others felt it prudent to plan for a bad situation.

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Robert T
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Post by Robert T » Sun Jun 03, 2007 10:27 am

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From Swensen’s Unconventional Success
  • “…two substantial funds management organizations adhere to high fiduciary standards, adopted in the context of corporate cultures designed to serve investor interests. Vanguard and TIAA-CREF both operate on a not-for-profit basis, allowing the companies to make individual investors interests paramount in the funds management process.”

    “The institutional nature of Barclay’s and State Street’s money management business provides substantial benefits to ETF shareholder.”…”The primary reason for the investor-friendly character of the ETF market stems from the institutional index fund management roots of the market’s two largest investment firms – Barclays Global Investors and State Street Global Investors”.
From Bernstein’s Four Pillars [in addition to Vanguard and TIAA-CREF]
  • “If you employ a qualified financial advisor, Dimensional Funds Advisors does a superb job of indexing almost any asset class you might wish to own at low expense. There are a few for-profit fund companies like Dodge & Cox, T.Rowe Price, and Bridgeway, that are known for their investment discipline, intellectual honesty, and shareholder orientation.”
Unfortunately for most mutual fund companies, corporate profits come at the expense of investor interests. Here are a few ‘average’ examples and views from Swensen’s book of the dominance of profit motives (in for profit companies):
  • “…fees as a percentage of assets remained stable over the last two decades as assets grew more than eighty six fold…”

    “…In 1979…the median sales load amounted to a staggering 8.5 percent of assets. By 1999, the median front-end load declined to a still substantial 4.75 percent.”…”the extent that annual 12b-1 fees [introduced in 1980] displace up-front charges, long-term investors end up worse off…”…“…mutual fund advisors who charge 12b-1 fees take nearly the entire 12b-1 fee to the bank”

    “For the vast majority of mutual-fund investors, the future appears dim. Regulators identify abuses, deal superficially with the most high-profile issues, and move on to other matters. Meanwhile, the mutual-fund industry finds new ways to place profits above investor interests. Even if the SEC eliminates pay-to-play, revenue sharing, enforces fair-value pricing mechanisms and bans soft dollars, the mutual fund industry, as it has from the beginning in 1924, will employ its endless creativity to find visible and less visible means to take advantage of individual investors”.
  • 401(k) plans seem to be a significant source of fees for brokers

    “…roughly 90 percent of 401(k) plans ask asset management firms for fees in exchange for placing the firm’s offerings on the plan’s menus”.

    “….the Vanguard’s director of institutional sales said he had been contacted by brokers who wanted to include Vanguard funds in a menu of 401(k) alternatives. “When brokers realize they won’t be compensated for placing our funds in a plan, they typically hang up on us.”

So security (mutual fund) selection does matter IMO. I found Swensen's book extremely helpful in shedding light on some of the actions taken by for-profit mutual fund companies at the expense of investors.... Its certainly good to have people like Jack Bogle on our side!

Robert
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    Last edited by Robert T on Sun Jun 03, 2007 10:35 am, edited 1 time in total.

    Valuethinker
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    Re: Recommendations for other low expense quality companies

    Post by Valuethinker » Sun Jun 03, 2007 10:34 am

    jart1217 wrote:I am considering spreading my portfolio among two different companies in the event something (I don't know what) happens to my account at Vanguard. Just wondered if others felt the need to spread their portfolios between companies and what companies would you recommend?
    Honestly I think ETFs are probably your best bet.

    jrherndo
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    Post by jrherndo » Sun Jun 03, 2007 9:57 pm

    I'm spread out between half a dozen companies. Vanguard is hands down my favorite. T. Rowe Price is in second place for me, though still not that close to Vanguard, but definitely at the top compared to my other holdings. I think I put T. Rowe Price in 2nd place because of my personal customer service experiences with them. I know it can very person to person, but they've been pretty great whenever I've called them with questions.

    -j

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