Fell in Love with Fidelity

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Jack FFR1846
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Re: Fell in Love with Fidelity

Post by Jack FFR1846 » Wed Jan 09, 2019 2:56 pm

Dottie57 wrote:
Tue Jan 08, 2019 6:44 pm
Jack FFR1846 wrote:
Tue Jan 08, 2019 5:59 pm
KlangFool wrote:
Tue Jan 08, 2019 5:35 pm
bck63,

1) As a small investor, why would you buy 3 funds? One fund makes a lot more sense.

2) How are you going to rebalance? Do you have to pay anything to exchange one fund to another?

KlangFool
I agree with the idea here. My belief is that until you have $100k invested, go 100% total US Stock. With Fidelity, use the zero fund FZROX. No minimum, zero ER. I own it along with other Fidelity, Vanguard and Schwab funds and ETFs.
Just note that FZROX is based on Fidelity’s own proprietary index and was created in 2017. I prefer FSKAX which follows the long existing Dow Jones Total U.S. market index.
I too like FSKAX.....but also FZROX. I started an experiment on August 6th, splitting my equity position at Fidelity equally between these 2 funds. FZROX very slightly outperforms so far after only a few months.
Bogle: Smart Beta is stupid

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EyeYield
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Re: Fell in Love with Fidelity

Post by EyeYield » Wed Jan 09, 2019 3:39 pm

radiowave wrote:
Tue Jan 08, 2019 10:31 pm
EyeYield wrote:
Tue Jan 08, 2019 9:30 pm
radiowave wrote:
Tue Jan 08, 2019 5:43 pm
southerndoc wrote:
Tue Jan 08, 2019 5:26 pm
Fidelity has been great for me. So much that I'm moving my IRA's to Fidelity (moving Roth, rolling SEP into SE 401(k), moving wife's Roth/trad IRA for non-deductible contributions). Plan on opening an IRA for non-deductible contributions and Roth conversion mid-year.

I've heard some so so things about their checking (cash management) account. I just opened one, but have yet to fund it. It's probably only going to be used for ATM withdrawals as Bank of America loves to charge for every ATM transaction.
Just an FYI on the Fidelity cash management accounts (CMA). The debit card you will use at ATMs, the good news is Fidelity will reimburse the 3.00 charge and it happens within a couple business days. However you cannot turn off or reduce the daily sales limit on the debit side of the card so that potentially exposes your entire CMA account to fraud if you are using it as a debit card for purchases. One work around is to create a second CMA account and just keep a small amount of money you might use for ATM withdrawals. Of course if you don't use the debit side of the card, that minimizes your exposure. My sister had several thousand dollars withdrawn from her bank account last year when her debit card was hacked and its not the same as a credit card hack where you can stop payment. Once the money is withdrawn from our account on the debit card, even if it's fraud, it could take weeks or months to get it back.
Are you sure about what I bolded? I am currently looking into a CMA account and spent a long time on the phone this morning with a CMA rep at Fidelity and I was adamant about being able to set the limit on the debit card to $0.00 and only use it for ATM cash withdrawals with a limit of $300 and was told that it wouldn’t be a problem.

I will call again in the morning to verify.
EyeYield, I had the same conversation with FIdelity CSR about 2 years ago when I set up my CMA and they were certain at that time it was not possible to drop daily sales limit to 0. In two years they may have changed their policy. If you can confirm Fidelity can set up the CMA debit card as ATM only, please let us know.

Thanks
It turns out you are right, there’s no way for an individual to set his or her own limits. The first rep I talked to was wrong; many apologies from Fidelity.
I’m glad I followed up on this, so thanks.

I went deep into this, having been connected to Elan Financial Services, whom Fidelity outsources the debit/ATM card.

The good news, that works for me at least, is that I can place a voluntary restriction on the card so it can’t be used for anything.
Then when I need cash from an ATM, I can call and remove the restriction for a two hour window to get what I need.

Since I only withdraw $300 in cash about ten times a year, this won’t be a tremendous burden. Actually I might be motivated to withdraw more cash each time, so I’ll visit ATM’s less.

I hope this info is helpful to others.
"The stock market is a giant distraction from the business of investing." - Jack Bogle

augustwest73
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Re: Fell in Love with Fidelity

Post by augustwest73 » Wed Jan 09, 2019 4:29 pm

I used to love Fidelity for all the reasons mentioned already. I moved all my old 401Ks to them and it was a breeze...And then, I tried to move a few thousand out of Fidelity and they made it a total hassle including requiring the dreaded bank medallion. When I consolidated my accounts with them, no one required a bank medallion and I was able to do it all electronically. Fidelity refused to make it easy. It all had to be on paper, so I have not put any new money in there for quite awhile.

Dottie57
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Re: Fell in Love with Fidelity

Post by Dottie57 » Wed Jan 09, 2019 4:34 pm

augustwest73 wrote:
Wed Jan 09, 2019 4:29 pm
I used to love Fidelity for all the reasons mentioned already. I moved all my old 401Ks to them and it was a breeze...And then, I tried to move a few thousand out of Fidelity and they made it a total hassle including requiring the dreaded bank medallion. When I consolidated my accounts with them, no one required a bank medallion and I was able to do it all electronically. Fidelity refused to make it easy. It all had to be on paper, so I have not put any new money in there for quite awhile.
I actually like hard. I don’t want it to be easy. And yes I now have to set up the dreaded gold medallion. But it is for my own benefit.

drzzzzz
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Re: Fell in Love with Fidelity

Post by drzzzzz » Wed Jan 09, 2019 4:40 pm

augustwest73 wrote:
Wed Jan 09, 2019 4:29 pm
I used to love Fidelity for all the reasons mentioned already. I moved all my old 401Ks to them and it was a breeze...And then, I tried to move a few thousand out of Fidelity and they made it a total hassle including requiring the dreaded bank medallion. When I consolidated my accounts with them, no one required a bank medallion and I was able to do it all electronically. Fidelity refused to make it easy. It all had to be on paper, so I have not put any new money in there for quite awhile.
Interesting to hear, I have sent money to my bank and also transferred entire ira accounts at Fidelity to other custodians electronically and so far haven't had to deal with the bank medallion issue or inability to transfer funds easily.

international001
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Re: Fell in Love with Fidelity

Post by international001 » Wed Jan 09, 2019 5:41 pm

KlangFool wrote:
Wed Jan 09, 2019 8:31 am


international001,

<<If you have a whole portfolio Taxable + tax-sheltered.. what difference does it make if you have one fund for stocks or 20. You can just rebalance on the tax-sheltered side>>

1) It is easier to tax loss harvest with fewer stock funds.

2) It is easier to track and manage with fewer stock funds.

<<What did you mean by 25%. I usually rebalance when the difference between what I have and I should have for a particular fund is > 5%>>

I have 10% of my portfolio allocated to small cap value.

A) By 5% rule, I would rebalance when it is 5% or 15%

B) By 25% rule, I would rebalance at 7.5% or 12.5%. Aka off by 25%.

In this case, the 25% rule will trigger first.

KlangFool
Oh.. I see. I guess rule A or B comes to play more often depending on how many funds you have. For rebalancing, for me sometimes it becomes more of an art, since the buying fund may be trigered by the rules but the selling funds may not.

Fewer funds are easier to manage, but I find TLH more convenient with more funds. If you have for LC and LCV, for instance, you can buy and sell each other when they go down.

KlangFool
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Re: Fell in Love with Fidelity

Post by KlangFool » Wed Jan 09, 2019 6:06 pm

international001 wrote:
Wed Jan 09, 2019 5:41 pm
KlangFool wrote:
Wed Jan 09, 2019 8:31 am


international001,

<<If you have a whole portfolio Taxable + tax-sheltered.. what difference does it make if you have one fund for stocks or 20. You can just rebalance on the tax-sheltered side>>

1) It is easier to tax loss harvest with fewer stock funds.

2) It is easier to track and manage with fewer stock funds.

<<What did you mean by 25%. I usually rebalance when the difference between what I have and I should have for a particular fund is > 5%>>

I have 10% of my portfolio allocated to small cap value.

A) By 5% rule, I would rebalance when it is 5% or 15%

B) By 25% rule, I would rebalance at 7.5% or 12.5%. Aka off by 25%.

In this case, the 25% rule will trigger first.

KlangFool
Oh.. I see. I guess rule A or B comes to play more often depending on how many funds you have. For rebalancing, for me sometimes it becomes more of an art, since the buying fund may be trigered by the rules but the selling funds may not.

Fewer funds are easier to manage, but I find TLH more convenient with more funds. If you have for LC and LCV, for instance, you can buy and sell each other when they go down.
international001,

<<. For rebalancing, for me sometimes it becomes more of an art, since the buying fund may be trigered by the rules but the selling funds may not.>>

40% of my portfolio is in the Wellington fund (65/35). It rebalanced itself. For my portfolio, it will take a really bad day to trigger rebalancing. Maybe once every 5 years.

<<Fewer funds are easier to manage, but I find TLH more convenient with more funds. If you have for LC and LCV, for instance, you can buy and sell each other when they go down.>>

I do that too. So, I have 2 funds for each asset class (SCV, US stock, International stock). But, usually, I do not keep both of them at the same time.

KlangFool

radiowave
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Re: Fell in Love with Fidelity

Post by radiowave » Wed Jan 09, 2019 6:57 pm

EyeYield wrote:
Wed Jan 09, 2019 3:39 pm
It turns out you are right, there’s no way for an individual to set his or her own limits. The first rep I talked to was wrong; many apologies from Fidelity.
I’m glad I followed up on this, so thanks.

I went deep into this, having been connected to Elan Financial Services, whom Fidelity outsources the debit/ATM card.

The good news, that works for me at least, is that I can place a voluntary restriction on the card so it can’t be used for anything.
Then when I need cash from an ATM, I can call and remove the restriction for a two hour window to get what I need.

Since I only withdraw $300 in cash about ten times a year, this won’t be a tremendous burden. Actually I might be motivated to withdraw more cash each time, so I’ll visit ATM’s less.

I hope this info is helpful to others.
If you are looking for an ATM only card an alternative is Bank of America, they still issue one.

I was hopeful your original post was correct, oh well . . .


[edited typo]
Last edited by radiowave on Wed Jan 09, 2019 7:19 pm, edited 1 time in total.
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whodidntante
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Re: Fell in Love with Fidelity

Post by whodidntante » Wed Jan 09, 2019 7:00 pm

Fidelity has always been good to me. It's my oldest surviving account.

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EyeYield
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Re: Fell in Love with Fidelity

Post by EyeYield » Wed Jan 09, 2019 8:55 pm

radiowave wrote:
Wed Jan 09, 2019 6:57 pm
EyeYield wrote:
Wed Jan 09, 2019 3:39 pm
It turns out you are right, there’s no way for an individual to set his or her own limits. The first rep I talked to was wrong; many apologies from Fidelity.
I’m glad I followed up on this, so thanks.

I went deep into this, having been connected to Elan Financial Services, whom Fidelity outsources the debit/ATM card.

The good news, that works for me at least, is that I can place a voluntary restriction on the card so it can’t be used for anything.
Then when I need cash from an ATM, I can call and remove the restriction for a two hour window to get what I need.

Since I only withdraw $300 in cash about ten times a year, this won’t be a tremendous burden. Actually I might be motivated to withdraw more cash each time, so I’ll visit ATM’s less.

I hope this info is helpful to others.
If you are looking for an ATM only card an alternative is Bank of America, they still issue one.

I was hopeful your original post was correct, oh well . . .


[edited typo]
Alas, after 25 years of using BofA for my primary checking account, funded by an annual wire transfer from Fidelity, I’ve become disenchanted with their service. They recently refused a check to be deposited, one that I had deposited in years past, due to new BofA rules, and they will only redeem 7 EE Bonds at a time.
They’re the reason I want a Fidelity checking account.

Their ATM/ Debit card did allow a $1.00 limit on Debit though.

I have a small Chase account that will redeem as many EE Bonds as I want and they let me deposit the same check that BofA denied.

Having a Fidelity CMA account will make my life so much simpler.
As I think about it, I kind of like the idea that my ATM/Debit can be “locked” until I need it. And no more wire transfers from my broker to my banker. I’m such a Luddite. :oops:
"The stock market is a giant distraction from the business of investing." - Jack Bogle

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Re: Fell in Love with Fidelity

Post by patelbhavesh » Thu Jan 10, 2019 5:48 pm

BoglePaul wrote:
Wed Jan 09, 2019 9:20 am
When I was young the old timers told me to go with Vanguard, however scored by Vanguard's tiered fee levels, I did business with Fidelity. Now that I am older I do business with Vanguard. I wish I had started with Vanguard.
+1

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bck63
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Re: Fell in Love with Fidelity

Post by bck63 » Wed Mar 20, 2019 6:20 am

UpperNwGuy wrote:
Tue Jan 08, 2019 6:32 pm
bck63 wrote:
Tue Jan 08, 2019 5:14 pm
Okay so I can be a little impulsive, but I opened a Fidelity brokerage account and have fallen in love. I had three goals I wanted to achieve:

-- Invest in bond market index fund
-- increase international stock exposure with an international index fund
-- Expand US stock exposure with a total stock market index fund.

This would be in addition to my current investments in my Vanguard Brokerage account. If I did it with Vanguard, I would have had to either sell other positions or save $9,000 for the new funds. As a small investor that is not an easy task, and I would have had to take from my emergency fund if I wanted to make the purchases right away without selling other positions.

Then I find Fidelity. I found three funds, two with no ER, and all three with no minimum investment. Perfect.

I guess I'm not offering any new information here. I'm just excited and decided to share.
I'm excited for you. Fidelity has really upped its game in recent months, and I think you're wise to take advantage of the opportunity. Last August everybody was talking about the 0% ERs, but I kept saying that the most noteworthy improvement was doing away with the minimum investment requirement — because it enables people like you to do what you just did. Good luck with your new Fidelity portfolio, and keep us posted on your progress. (By the way, like you, I started out with a three fund portfolio in taxable. I chose not to go the "start-with-one-fund" approach advocated by some — and I'm glad I did.)
As requested, just an update with my Fidelity experience. It's going great. I opened a CMA account and use it for day-to-day spending and short-term savings. The CMA I named "Fixed Income." I have the Treasury-only MMF (FDLXX) and the US Bond Index Fund (FXNAX) in there. I keep no money in the Core FDIC part of the CMA. I use the MMF for small expenditures from time to time. I don't spend a lot so there are not big fluctuations in the MMF balance. This is a taxable account that is primarily for savings so I'm using the US Bond fund to squeeze out just a little more yield for what I have over and above what's in the MMF.

Then I have another brokerage account I named "Equities." I have the ZERO Total Market Index Fund (FZROX) and the ZERO International Index Fund (FZILX) in there.

I keep the two brokerage accounts at about a 50/50 allocation. So far so good and I really like the CMA. My wife and I opened one jointly as well and are using that as our primary savings account. We got check-writing privileges for the joint account and will use it as a new car/vacation/write-a-check-for-the-plumber-etc fund.

If anyone has experiences with the CMA that might be useful please share. I am not moving anything from vanguard (Roth IRA, Rollover IRA and taxable account) but really like Fidelity so far.

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Re: Fell in Love with Fidelity

Post by 3-20Characters » Wed Mar 20, 2019 6:38 am

BoglePaul wrote:
Wed Jan 09, 2019 9:20 am
Fidelity is taking a tiny loss on their index funds to get you in the door with big plans to capture your money at a later stage in your life. Fidelity has a building full of marketers coming up with schemes to convert you to a profitable customer. Perhaps they will capture your funds when you are older and more vulnerable to advertisements or maybe your wife will inherit your Fidelity account and they will market the benefits of their 'managed portfolios' on the handover. Vanguard has straightforward pricing and for a tiny amount more per year you can create a positive business relationship. Start off doing business with Vanguard, paying for what you get, and as you grow in your career and life you will already be familiar with a good friend. Choose to do business with the Vanguard's of the world.

When I was young the old timers told me to go with Vanguard, however scored by Vanguard's tiered fee levels, I did business with Fidelity. Now that I am older I do business with Vanguard. I wish I had started with Vanguard.
:beer

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Vulcan
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Re: Fell in Love with Fidelity

Post by Vulcan » Wed Mar 20, 2019 7:21 am

BoglePaul wrote:
Wed Jan 09, 2019 9:20 am
Fidelity is taking a tiny loss on their index funds to get you in the door with big plans to capture your money at a later stage in your life. Fidelity has a building full of marketers coming up with schemes to convert you to a profitable customer. Perhaps they will capture your funds when you are older and more vulnerable to advertisements or maybe your wife will inherit your Fidelity account and they will market the benefits of their 'managed portfolios' on the handover. Vanguard has straightforward pricing and for a tiny amount more per year you can create a positive business relationship. Start off doing business with Vanguard, paying for what you get, and as you grow in your career and life you will already be familiar with a good friend. Choose to do business with the Vanguard's of the world.

When I was young the old timers told me to go with Vanguard, however scored by Vanguard's tiered fee levels, I did business with Fidelity. Now that I am older I do business with Vanguard. I wish I had started with Vanguard.
+100
This can not be understated. They are out to get you. Or, failing that, your heirs. Think long.

We have always transferred all our Fidelity-managed employer accounts to Vanguard IRAs at every job change.
Couldn't be happier, especially now that Vanguard introduced Admiral shares of Total World Stock Index.
If you torture the data long enough, it will confess to anything. ~Ronald Coase

fwellimort
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Re: Fell in Love with Fidelity

Post by fwellimort » Wed Mar 20, 2019 7:56 am

Honestly, I think services wise, Fidelity is currently the leading brokerage for us Bogleheads.
Fidelity has recently been aggressive in beating its competitors to gain more market presence in 401k plans (in which Fidelity charges a notable fee).

When I compare Fidelity to Vanguard, here are a few things I notice of Fidelity's "weakness".
1. Money market funds. Fidelity just simply grabs more of the profits than Vanguard. I leave my savings at Vanguard because of this.
2. Tax efficiency. In a taxable, Vanguard funds have to be compared with iShares equivalent (ITOT/IXUS). If I am not incorrect, Vanguard ETF going forward will be lower in expense ratio than iShares again. Plus Vanguard redistributes 100% of its sharelending profits while iShares only 70%.
3. "world fund". iShares equivalent is so overpriced in its fees compared to Vanguard.

For #2, I think once the patent expires within ~5 years, this problem should be solved as Fidelity could makes its incredibly low fee (if not 0 fee) funds be just as tax efficient.
For #3, you can always purchase Domestic and International seperately.

Currently, I utilize my Fidelity account like my checkings account and invest for my tax-deferred. I use Vanguard as a Savings Account and as my taxable investment.
But I have to admit, Fidelity clearly looks like the leading brokerage for Bogleheads nowadays. It is beating Vanguard in Vanguard's own game.
However, my 401(k) plan with Fidelity... the fees do tilt me off. From there I understand how Fidelity is pulling this off. But again, the fees are still incredibly minor (it is still one of the three best brokerages for retirement investing) and not something that will affect my returns.

It's great to see brokerages compete with each other. Leads to better products for everyone.
As long as Vanguard is alive and hold the majority of indexing market, Fidelity will constantly try to better itself. Hence why I constantly recommend Vanguard to my family members and friends :)

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bck63
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Re: Fell in Love with Fidelity

Post by bck63 » Wed Mar 20, 2019 8:26 am

Vulcan wrote:
Wed Mar 20, 2019 7:21 am
BoglePaul wrote:
Wed Jan 09, 2019 9:20 am
Fidelity is taking a tiny loss on their index funds to get you in the door with big plans to capture your money at a later stage in your life. Fidelity has a building full of marketers coming up with schemes to convert you to a profitable customer. Perhaps they will capture your funds when you are older and more vulnerable to advertisements or maybe your wife will inherit your Fidelity account and they will market the benefits of their 'managed portfolios' on the handover. Vanguard has straightforward pricing and for a tiny amount more per year you can create a positive business relationship. Start off doing business with Vanguard, paying for what you get, and as you grow in your career and life you will already be familiar with a good friend. Choose to do business with the Vanguard's of the world.

When I was young the old timers told me to go with Vanguard, however scored by Vanguard's tiered fee levels, I did business with Fidelity. Now that I am older I do business with Vanguard. I wish I had started with Vanguard.
+100
This can not be understated. They are out to get you. Or, failing that, your heirs. Think long.

We have always transferred all our Fidelity-managed employer accounts to Vanguard IRAs at every job change.
Couldn't be happier, especially now that Vanguard introduced Admiral shares of Total World Stock Index.
I hear you. They are a profit-making and profit-seeking company. But there are lots of positives that make it easy for a small investor (like me). I did not want to sell other positions to get a bond fund, total stock market fund and international fund. I would have had to take 9K from my emergency fund to do it. The no minimum to invest is very attractive. And the zero funds were appealing, although I do know they are less tax efficient than vanguard. However when I last looked the after-tax difference vs VTSAX was eight basis points. I'm not going to sweat it and will just keep saving.

Also of note, FZROX is performing very well. YTD it is at 14.01%, identical to VTSAX.

I also like being able to use the cash management feature. It is very convenient. Vanguard is closing theirs, and you needed 500K+ to use it anyway. I'm only halfway there in Vanguard.

Fidelity is clearly appealing to small and new investors. I'm telling my young son who is just getting started that he can open his Roth IRA at Fidelity with FIVE BUCKS if he wants. Very, very appealing.

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Portfolio7
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Re: Fell in Love with Fidelity

Post by Portfolio7 » Wed Mar 20, 2019 9:25 am

My 401K access routes through Fidelity, and I very much appreciate the capabilities they offer. I've moved all our IRAs and past 401k accounts to Fidelity. I like that I can talk to a person at the local office. My fees are very low; I've paid a few minor trading fees when I wanted something outside the typical no-trading-fee etf's, but in general it's not difficult to keep costs down.

In addition, we opened a Roth IRA here for my 15 yo son, simple and straightforward. I'm very happy with Fidelity overall.
An investment in knowledge pays the best interest.

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Re: Fell in Love with Fidelity

Post by jpsfranks » Wed Mar 20, 2019 10:27 am

Vulcan wrote:
Wed Mar 20, 2019 7:21 am
+100
This can not be understated. They are out to get you. Or, failing that, your heirs. Think long.

We have always transferred all our Fidelity-managed employer accounts to Vanguard IRAs at every job change.
Couldn't be happier, especially now that Vanguard introduced Admiral shares of Total World Stock Index.
I am about split evenly in terms of assets between Vanguard and Fidelity at the moment, with my main taxable account at Vanguard and all my other accounts at Fidelity. In the time I've been with Fidelity they have only gotten better. Their indexing offerings have improved including more and lower fee funds and free iShare ETF trading. And they've offered a number of good products that I've adopted including a good cash management product, a good 2% cashback credit card, a no fee Solo 401k that allowed me to transfer in an old employer 401k, and most recently a no fee HSA. Meanwhile it seems like Vanguard's been pretty stagnant. If "out to get me" means offering products I want, then fine.

I still regard Vanguard as the indexing champ, especially when investing in a taxable account, but you can buy Vanguard ETFs anywhere. If I were starting over today I'm not sure I would actually open an account at Vanguard directly at all. And given the apparent lack of investment in their retail products I'm increasingly coming to think that Vanguard themselves would ultimately prefer it that way. I sometimes wonder whether given Vanguard's structure where the funds own the company it's probably easy for everything but the funds themselves to be seen as merely cost centers.

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Vulcan
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Re: Fell in Love with Fidelity

Post by Vulcan » Wed Mar 20, 2019 11:07 am

bck63 wrote:
Wed Mar 20, 2019 8:26 am
I hear you. They are a profit-making and profit-seeking company. But there are lots of positives that make it easy for a small investor (like me). I did not want to sell other positions to get a bond fund, total stock market fund and international fund. I would have had to take 9K from my emergency fund to do it. The no minimum to invest is very attractive. And the zero funds were appealing, although I do know they are less tax efficient than vanguard. However when I last looked the after-tax difference vs VTSAX was eight basis points. I'm not going to sweat it and will just keep saving.

Also of note, FZROX is performing very well. YTD it is at 14.01%, identical to VTSAX.

I also like being able to use the cash management feature. It is very convenient. Vanguard is closing theirs, and you needed 500K+ to use it anyway. I'm only halfway there in Vanguard.

Fidelity is clearly appealing to small and new investors. I'm telling my young son who is just getting started that he can open his Roth IRA at Fidelity with FIVE BUCKS if he wants. Very, very appealing.
1. Vanguard now has Admiral shares of Total World Stock Index fund (VTWAX) with $3K minimum. No need to separate domestic from international anymore. One fund owns the world in market cap proportions.

2. I, too, use Fidelity's cash management account as one of my checking accounts. It's a good account. I don't feel that I owe them rights to management of my investments for the right to have a checking account with them - and they seem to agree, and impose no such requirements.

3. That's how they get you. But I think long term, and opened my kids' accounts at Vanguard, first buying VT, and then converting it to VTWAX when 3K minimum is reached.
Last edited by Vulcan on Wed Mar 20, 2019 11:18 am, edited 2 times in total.
If you torture the data long enough, it will confess to anything. ~Ronald Coase

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Vulcan
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Re: Fell in Love with Fidelity

Post by Vulcan » Wed Mar 20, 2019 11:10 am

jpsfranks wrote:
Wed Mar 20, 2019 10:27 am
And they've offered a number of good products that I've adopted including a good cash management product, a good 2% cashback credit card, a no fee Solo 401k that allowed me to transfer in an old employer 401k, and most recently a no fee HSA. Meanwhile it seems like Vanguard's been pretty stagnant. If "out to get me" means offering products I want, then fine.
I, too, use their CMA, HSA, and credit card. My wife's current employer-sponsored accounts are also there (and mine is elsewhere).
For everything else, there's VTWAX at Vanguard.
Vanguard is there to act in my best interest.
Fidelity is there to make profit on me (or my heirs) one day.
Why would I not want to keep as much money as I can at Vanguard? I would not not want that, personally.
If you torture the data long enough, it will confess to anything. ~Ronald Coase

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bck63
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Re: Fell in Love with Fidelity

Post by bck63 » Wed Mar 20, 2019 11:16 am

Vulcan wrote:
Wed Mar 20, 2019 11:07 am
3. That's how they get you. But I think long term, and opened my kids' Roths at Vanguard, first buying VT, and then converting it to VTWAX when 3K minimum is reached.
That's a great idea.

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jpsfranks
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Re: Fell in Love with Fidelity

Post by jpsfranks » Wed Mar 20, 2019 2:01 pm

Vulcan wrote:
Wed Mar 20, 2019 11:10 am
I, too, use their CMA, HSA, and credit card. My wife's current employer-sponsored accounts are also there (and mine is elsewhere).
For everything else, there's VTWAX at Vanguard.
Vanguard is there to act in my best interest.
Fidelity is there to make profit on me (or my heirs) one day.
Why would I not want to keep as much money as I can at Vanguard? I would not not want that, personally.
I stated my reasons for increasingly preferring Fidelity above (fees coming down, many uniquely good products). In addition I personally prefer their site and app.

To turn the question around, why do you prefer to keep your money with Vanguard? It seems like they are offering you fewer reasons to do so, for example recently offering many ETFs (which can be purchased anywhere) with lower expense ratios than the equivalent Admiral Funds, and shuttering VanguardAdvantage.

As for concern for heirs, I'm not sure what this means. My grandfather passed some years ago and my mother was the executor. He had a decent sized Fidelity account. I accompanied her to a few meetings to a Fidelity branch where they were very courteous and helped with the mechanics of liquidating the accounts. They never tried to upsell anything (admittedly we made it clear exactly what we wanted of them). I have not gone through a similar process with Vanguard so cannot speak to that experience, but I can say having the local branch was quite helpful especially to my mother.

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Vulcan
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Re: Fell in Love with Fidelity

Post by Vulcan » Wed Mar 20, 2019 2:56 pm

jpsfranks wrote:
Wed Mar 20, 2019 2:01 pm
To turn the question around, why do you prefer to keep your money with Vanguard?
Because Vanguard's management structure align their long term interests with mine, and because they offer VTWAX, the only stock fund I need.
If you torture the data long enough, it will confess to anything. ~Ronald Coase

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bck63
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Re: Fell in Love with Fidelity

Post by bck63 » Wed Mar 20, 2019 3:17 pm

Vulcan wrote:
Wed Mar 20, 2019 2:56 pm
jpsfranks wrote:
Wed Mar 20, 2019 2:01 pm
To turn the question around, why do you prefer to keep your money with Vanguard?
Because Vanguard's management structure align their long term interests with mine, and because they offer VTWAX, the only stock fund I need.
Fidelity now a good selection of products with the lowest fees in the industry. They open investing to a whole world of small investors who otherwise would find it very difficult to begin investing at Vanguard.

Fidelity's long term interests are aligned with mine and every other average investor.

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Vulcan
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Re: Fell in Love with Fidelity

Post by Vulcan » Wed Mar 20, 2019 3:35 pm

bck63 wrote:
Wed Mar 20, 2019 3:17 pm
Vulcan wrote:
Wed Mar 20, 2019 2:56 pm
jpsfranks wrote:
Wed Mar 20, 2019 2:01 pm
To turn the question around, why do you prefer to keep your money with Vanguard?
Because Vanguard's management structure align their long term interests with mine, and because they offer VTWAX, the only stock fund I need.
Fidelity now a good selection of products with the lowest fees in the industry. They open investing to a whole world of small investors who otherwise would find it very difficult to begin investing at Vanguard.

Fidelity's long term interests are aligned with mine and every other average investor.
3K minimum is not exactly prohibitive for even the beginning investors.
If you torture the data long enough, it will confess to anything. ~Ronald Coase

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bck63
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Re: Fell in Love with Fidelity

Post by bck63 » Wed Mar 20, 2019 3:42 pm

Vulcan wrote:
Wed Mar 20, 2019 3:35 pm
bck63 wrote:
Wed Mar 20, 2019 3:17 pm
Vulcan wrote:
Wed Mar 20, 2019 2:56 pm
jpsfranks wrote:
Wed Mar 20, 2019 2:01 pm
To turn the question around, why do you prefer to keep your money with Vanguard?
Because Vanguard's management structure align their long term interests with mine, and because they offer VTWAX, the only stock fund I need.
Fidelity now a good selection of products with the lowest fees in the industry. They open investing to a whole world of small investors who otherwise would find it very difficult to begin investing at Vanguard.

Fidelity's long term interests are aligned with mine and every other average investor.
3K minimum is not exactly prohibitive for even the beginning investors.
I say this respectfully, but that represents a gross misunderstanding of someone who is struggling to pay bills, put some emergency savings aside, and who also wants to invest in their future. It sounds like you really have no understanding of that kind of financial situation.

3K is quite prohibitive to most of American Wage earners.

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Vulcan
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Re: Fell in Love with Fidelity

Post by Vulcan » Wed Mar 20, 2019 3:53 pm

bck63 wrote:
Wed Mar 20, 2019 3:42 pm
Vulcan wrote:
Wed Mar 20, 2019 3:35 pm
bck63 wrote:
Wed Mar 20, 2019 3:17 pm
Vulcan wrote:
Wed Mar 20, 2019 2:56 pm
jpsfranks wrote:
Wed Mar 20, 2019 2:01 pm
To turn the question around, why do you prefer to keep your money with Vanguard?
Because Vanguard's management structure align their long term interests with mine, and because they offer VTWAX, the only stock fund I need.
Fidelity now a good selection of products with the lowest fees in the industry. They open investing to a whole world of small investors who otherwise would find it very difficult to begin investing at Vanguard.

Fidelity's long term interests are aligned with mine and every other average investor.
3K minimum is not exactly prohibitive for even the beginning investors.
I say this respectfully, but that represents a gross misunderstanding of someone who is struggling to pay bills, put some emergency savings aside, and who also wants to invest in their future. It sounds like you really have no understanding of that kind of financial situation.

3K is quite prohibitive to most of American Wage earners.
There really is no urgency to begin investing with the first 3K saved. But if one is so inclined, they can buy ETFs at Vanguard with no commissions. 1 share of VT only costs $73.79 as of today's close.

The bigger problem to me is that no, Fidelity's interests are not aligned with mine.
Like any company, both Vanguard's and Fidelity's fiduciary duty is to its shareholders, not its customers.
With Vanguard, I am both the customer and a shareholder.
I sleep better knowing this.
If you torture the data long enough, it will confess to anything. ~Ronald Coase

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Artful Dodger
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Re: Fell in Love with Fidelity

Post by Artful Dodger » Wed Mar 20, 2019 4:57 pm

Hi bck63,

Long time Fidelity customer here. I've been very happy with their service.

Some features I use regularly.

Fullview - I have all my accounts from other institutions linked. Quick way to get a big picture of all my financial accounts, life insurance, mortgage / home value. I leave out my CC accounts as I pay off each month. Nice way to track total investment value and net worth over time. (Just to be fair, they had an older platform for Fullview, and pretty much botched their conversion to the new Fullview, but got things fixed finally.)

Analysis tab - this brings all the accounts together from Full view. There are various options to access. I use regularly to see my asset allocation over all my holdings.

Retirement planner - This is a very robust tool that uses Monte Carlo simulation to help you project readiness for retirement, and what you need to do to reach your goals. This also pulls from all the accounts set up in Fullview.

There are tons of useful features, investment tools, and reports available, but these are three I use regularly.

Topic Author
bck63
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Re: Fell in Love with Fidelity

Post by bck63 » Wed Mar 20, 2019 7:39 pm

Artful Dodger wrote:
Wed Mar 20, 2019 4:57 pm
Hi bck63,

Long time Fidelity customer here. I've been very happy with their service.

Some features I use regularly.

Fullview - I have all my accounts from other institutions linked. Quick way to get a big picture of all my financial accounts, life insurance, mortgage / home value. I leave out my CC accounts as I pay off each month. Nice way to track total investment value and net worth over time. (Just to be fair, they had an older platform for Fullview, and pretty much botched their conversion to the new Fullview, but got things fixed finally.)

Analysis tab - this brings all the accounts together from Full view. There are various options to access. I use regularly to see my asset allocation over all my holdings.

Retirement planner - This is a very robust tool that uses Monte Carlo simulation to help you project readiness for retirement, and what you need to do to reach your goals. This also pulls from all the accounts set up in Fullview.

There are tons of useful features, investment tools, and reports available, but these are three I use regularly.
Thanks Artful Dodger,

I just enrolled in Fullview after I read your post. Looks like it will be very helpful. Will check out the other stuff too. I have used the analysis tab to track my AA. Very helpful.

Thanks again.

nix4me
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Re: Fell in Love with Fidelity

Post by nix4me » Wed Mar 20, 2019 10:41 pm

I use Fidelity for all 401K and IRAs.
I use Vanguard for taxable - better MM funds.

Best of all worlds.

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ankonaman
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Re: Fell in Love with Fidelity

Post by ankonaman » Thu Mar 21, 2019 5:14 am

BoglePaul wrote:
Wed Jan 09, 2019 9:20 am
Fidelity is taking a tiny loss on their index funds to get you in the door with big plans to capture your money at a later stage in your life. Fidelity has a building full of marketers coming up with schemes to convert you to a profitable customer. Perhaps they will capture your funds when you are older and more vulnerable to advertisements or maybe your wife will inherit your Fidelity account and they will market the benefits of their 'managed portfolios' on the handover. Vanguard has straightforward pricing and for a tiny amount more per year you can create a positive business relationship. Start off doing business with Vanguard, paying for what you get, and as you grow in your career and life you will already be familiar with a good friend. Choose to do business with the Vanguard's of the world.

When I was young the old timers told me to go with Vanguard, however scored by Vanguard's tiered fee levels, I did business with Fidelity. Now that I am older I do business with Vanguard. I wish I had started with Vanguard.
Exactly this^^^. I recently had to help my widowed mother with her investments at Fidelity after my father died. The sales pitch in their "heaven like" office to manage her money for her for a 1% management fee on top of rolling her into higher fee mutual funds only was staggering. Let us charge you an additional 1% to manage your $$ while only placing you in a myriad of high fee mutual funds. No thank you.

Another hidden gem at Fidelity is their mutual funds have much higher turnover rates than at Vanguard. The churning buying and selling of their funds translates into increased hidden costs not shown in the management fees. Fidelity is geared more towards active investment individuals. If you are an active investor who prefers to trade individual stocks, puts/calls, LEAPS, utilize margin, etc. you would be much better served at Fidelity. I will give them credit for their customer service. Once we got beyond we were not utilizing their management services the customer service was very good; have to give them credit where credit is due.

UpperNwGuy
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Re: Fell in Love with Fidelity

Post by UpperNwGuy » Thu Mar 21, 2019 7:44 am

Vulcan wrote:
Wed Mar 20, 2019 3:35 pm
bck63 wrote:
Wed Mar 20, 2019 3:17 pm
Vulcan wrote:
Wed Mar 20, 2019 2:56 pm
jpsfranks wrote:
Wed Mar 20, 2019 2:01 pm
To turn the question around, why do you prefer to keep your money with Vanguard?
Because Vanguard's management structure align their long term interests with mine, and because they offer VTWAX, the only stock fund I need.
Fidelity now a good selection of products with the lowest fees in the industry. They open investing to a whole world of small investors who otherwise would find it very difficult to begin investing at Vanguard.

Fidelity's long term interests are aligned with mine and every other average investor.
3K minimum is not exactly prohibitive for even the beginning investors.
Yes, it is.

radiowave
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Re: Fell in Love with Fidelity

Post by radiowave » Thu Mar 21, 2019 12:54 pm

Note, in addition to reducing expenses ratios on several core mutual funds at Fidelity, they also set minimum balance to $0 (zero). Including the core funds: FSKAX (Total Market); FSGGX (Global ex US); and FXNAX (Total Bond).
Bogleheads Wiki: https://www.bogleheads.org/wiki/Main_Page

Dottie57
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Re: Fell in Love with Fidelity

Post by Dottie57 » Thu Mar 21, 2019 1:15 pm

bck63 wrote:
Wed Mar 20, 2019 3:42 pm
Vulcan wrote:
Wed Mar 20, 2019 3:35 pm
bck63 wrote:
Wed Mar 20, 2019 3:17 pm
Vulcan wrote:
Wed Mar 20, 2019 2:56 pm
jpsfranks wrote:
Wed Mar 20, 2019 2:01 pm
To turn the question around, why do you prefer to keep your money with Vanguard?
Because Vanguard's management structure align their long term interests with mine, and because they offer VTWAX, the only stock fund I need.
Fidelity now a good selection of products with the lowest fees in the industry. They open investing to a whole world of small investors who otherwise would find it very difficult to begin investing at Vanguard.

Fidelity's long term interests are aligned with mine and every other average investor.
3K minimum is not exactly prohibitive for even the beginning investors.
I say this respectfully, but that represents a gross misunderstanding of someone who is struggling to pay bills, put some emergency savings aside, and who also wants to invest in their future. It sounds like you really have no understanding of that kind of financial situation.

3K is quite prohibitive to most of American Wage earners.
+1

international001
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Re: Fell in Love with Fidelity

Post by international001 » Thu Mar 21, 2019 2:33 pm

Every situation is different
But I'm confused. For instance, can't a median income earner save 10% to invest for retirement?
The option is government taking your 10% and probably offering much lower returns

DonIce
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Re: Fell in Love with Fidelity

Post by DonIce » Thu Mar 21, 2019 3:50 pm

bck63 wrote:
Wed Mar 20, 2019 3:42 pm
I say this respectfully, but that represents a gross misunderstanding of someone who is struggling to pay bills, put some emergency savings aside, and who also wants to invest in their future. It sounds like you really have no understanding of that kind of financial situation.

3K is quite prohibitive to most of American Wage earners.
Someone who finds $3k prohibitive won't be able to save enough to make a substantial impact relative to their social security benefit, anyway.

drzzzzz
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Re: Fell in Love with Fidelity

Post by drzzzzz » Thu Mar 21, 2019 9:54 pm

Off topic from the original post, but I wanted to followup on some of the comments on here about a $3000 minimum for a Vanguard mutual fund and suggest that we should be more supportive of individuals who are trying to save and invest in mutual funds and who might not have the same amount of assets that many of the members who post on bogleheads seem to.

You might look at a statistic that the federal reserve reported last year that 40% of adults would not be able to afford a $400 emergency expense (https://www.federalreserve.gov/publicat ... penses.htm). That number should really put into perspective how many individuals are just getting by and who would find Vanguard's $3000 minimum prohibitive rather than the no minimum at Fidelity.

DonIce
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Re: Fell in Love with Fidelity

Post by DonIce » Thu Mar 21, 2019 10:29 pm

drzzzzz wrote:
Thu Mar 21, 2019 9:54 pm
You might look at a statistic that the federal reserve reported last year that 40% of adults would not be able to afford a $400 emergency expense (https://www.federalreserve.gov/publicat ... penses.htm). That number should really put into perspective how many individuals are just getting by and who would find Vanguard's $3000 minimum prohibitive rather than the no minimum at Fidelity.
But someone in that situation should be establishing an emergency fund held in an FDIC insured savings account earning 2-2.5% interest, not investing in stocks and bonds.

3-20Characters
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Re: Fell in Love with Fidelity

Post by 3-20Characters » Fri Mar 22, 2019 3:52 am

I have plenty of sympathy for individuals struggling to get by but I find the 3k minimum being prohibitive unconvincing. Presumably, many of us here (including me) started with $0 and overcame this hurdle when 3k was worth a lot more in real dollars (my first yearly full time salary was under 10k). In the meantime, there are savings accounts until the 3k can be put together. Anyone struggling to get their hands in 3k for seed money towards a long term savings strategy likely has an income/expense, debt, or other problem that Fidelity’s $0 minimum won’t solve.

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peterinjapan
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Re: Fell in Love with Fidelity

Post by peterinjapan » Fri Mar 22, 2019 6:27 am

I love Fidelity for my personal investing, but I recently got disgusted with both Fidelity as well as TD Ameritrade for offering a bunch of “free mutual funds” tt are (pardon my French) piles of shit, with 1% costs, or the ability to buy proper Vanguard mutual funds for $50 per transaction. I recenly pulled trigger and am moving my two daughters’ Roth IRA to Vanguard. There’s no other option, sadly.

I, who eschew all mutual funds personally, am plenty happy with Fidelity, and my son, an active trader, loves TD Ameritrade. But for IRA type investments, where fees are super important, perhaps they all need to be tossed in the trash bin in favor of Vanguard direct investments.

lazydavid
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Re: Fell in Love with Fidelity

Post by lazydavid » Fri Mar 22, 2019 8:05 am

bck63 wrote:
Tue Jan 08, 2019 7:26 pm
No big deal at all. My AA goal is 50/50, if stocks drop by 50 percent I invest 100% new money in stocks, for as long as it takes to rebalance. I'm not touching this money for 12-15 years. When things go the other way and stocks rise, I will rebalance by putting more money in bonds.
This works fine when you're starting with $10k. If you have (for purposes of discussion) a 60/40 AA and stocks drop by half, you now have $3k in stocks and $4k in bonds. Assuming minimal market movements in the intervening time, you just have to add the missing $3k back, which probably won't take very long.

But that strategy doesn't scale. What happens when you have $100k or $1M? In the latter situation, you're now down by $300k. It would take most of us quite a while to put that money back, during which time you'd likely miss out on the "rebalancing bonus" during the market recovery.

donaldfair71
Posts: 486
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Re: Fell in Love with Fidelity

Post by donaldfair71 » Fri Mar 22, 2019 8:11 am

DonIce wrote:
Thu Mar 21, 2019 3:50 pm
bck63 wrote:
Wed Mar 20, 2019 3:42 pm
I say this respectfully, but that represents a gross misunderstanding of someone who is struggling to pay bills, put some emergency savings aside, and who also wants to invest in their future. It sounds like you really have no understanding of that kind of financial situation.

3K is quite prohibitive to most of American Wage earners.
Someone who finds $3k prohibitive won't be able to save enough to make a substantial impact relative to their social security benefit, anyway.
For anyone who finds this site in the future and is thinking about investing to secure a better future, just know that this isn't true. Don't let starting with $5 discourage you. Especially if you start young enough, you can make a difference with starting much less than 3k.

donaldfair71
Posts: 486
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Re: Fell in Love with Fidelity

Post by donaldfair71 » Fri Mar 22, 2019 8:13 am

DonIce wrote:
Thu Mar 21, 2019 10:29 pm
drzzzzz wrote:
Thu Mar 21, 2019 9:54 pm
You might look at a statistic that the federal reserve reported last year that 40% of adults would not be able to afford a $400 emergency expense (https://www.federalreserve.gov/publicat ... penses.htm). That number should really put into perspective how many individuals are just getting by and who would find Vanguard's $3000 minimum prohibitive rather than the no minimum at Fidelity.
But someone in that situation should be establishing an emergency fund held in an FDIC insured savings account earning 2-2.5% interest, not investing in stocks and bonds.
I agree with that. But what if getting there takes a long time, then the next 3k takes a long time to get to? Just sit in cash? Why do that when Fido, and others, don't make you?

Topic Author
bck63
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Re: Fell in Love with Fidelity

Post by bck63 » Fri Mar 22, 2019 12:32 pm

lazydavid wrote:
Fri Mar 22, 2019 8:05 am
bck63 wrote:
Tue Jan 08, 2019 7:26 pm
No big deal at all. My AA goal is 50/50, if stocks drop by 50 percent I invest 100% new money in stocks, for as long as it takes to rebalance. I'm not touching this money for 12-15 years. When things go the other way and stocks rise, I will rebalance by putting more money in bonds.
This works fine when you're starting with $10k. If you have (for purposes of discussion) a 60/40 AA and stocks drop by half, you now have $3k in stocks and $4k in bonds. Assuming minimal market movements in the intervening time, you just have to add the missing $3k back, which probably won't take very long.

But that strategy doesn't scale. What happens when you have $100k or $1M? In the latter situation, you're now down by $300k. It would take most of us quite a while to put that money back, during which time you'd likely miss out on the "rebalancing bonus" during the market recovery.
Yes I've been thinking about that. My tax-deferred money is in the Vanguard 2030 target date fund. I'm referring to my taxable accounts. I'm wondering, given what you said, if in taxable I should just focus on a 50/50 *contribution* rate, and let the market go where it will. If I do that, I will have 10 years of expenditures in fixed income at retirement, excluding my tax-deferred money (I guess much more if I consider the RMDs from tax-deferred after age 70.5) If I do it that way I can live off stocks when the market is up, and have 10 years of fixed income to handle big downswings. Does this make sense?

Thanks for the input. Any further thoughts would be appreciated.

Topic Author
bck63
Posts: 524
Joined: Fri Sep 28, 2018 4:59 pm

Re: Fell in Love with Fidelity

Post by bck63 » Fri Mar 22, 2019 12:34 pm

donaldfair71 wrote:
Fri Mar 22, 2019 8:13 am
DonIce wrote:
Thu Mar 21, 2019 10:29 pm
drzzzzz wrote:
Thu Mar 21, 2019 9:54 pm
You might look at a statistic that the federal reserve reported last year that 40% of adults would not be able to afford a $400 emergency expense (https://www.federalreserve.gov/publicat ... penses.htm). That number should really put into perspective how many individuals are just getting by and who would find Vanguard's $3000 minimum prohibitive rather than the no minimum at Fidelity.
But someone in that situation should be establishing an emergency fund held in an FDIC insured savings account earning 2-2.5% interest, not investing in stocks and bonds.
I agree with that. But what if getting there takes a long time, then the next 3k takes a long time to get to? Just sit in cash? Why do that when Fido, and others, don't make you?
+1

lazydavid
Posts: 2375
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Re: Fell in Love with Fidelity

Post by lazydavid » Fri Mar 22, 2019 12:51 pm

bck63 wrote:
Fri Mar 22, 2019 12:32 pm
Yes I've been thinking about that. My tax-deferred money is in the Vanguard 2030 target date fund. I'm referring to my taxable accounts. I'm wondering, given what you said, if in taxable I should just focus on a 50/50 *contribution* rate, and let the market go where it will. If I do that, I will have 10 years of expenditures in fixed income at retirement, excluding my tax-deferred money (I guess much more if I consider the RMDs from tax-deferred after age 70.5) If I do it that way I can live off stocks when the market is up, and have 10 years of fixed income to handle big downswings. Does this make sense?

Thanks for the input. Any further thoughts would be appreciated.
I rebalance my taxable account. In fact, since I use a roboadvisor for my taxable account, it rebalances on its own, daily if need be. If I was doing it manually, I'd pick either an interval (once a quarter, every year on my birthday, whatever) and rebalance back to my target; or do what many people do and use rebalancing bands. If my AA gets more than 5% away from my target, rebalance back to my target.

Topic Author
bck63
Posts: 524
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Re: Fell in Love with Fidelity

Post by bck63 » Fri Mar 22, 2019 2:21 pm

lazydavid wrote:
Fri Mar 22, 2019 12:51 pm
bck63 wrote:
Fri Mar 22, 2019 12:32 pm
Yes I've been thinking about that. My tax-deferred money is in the Vanguard 2030 target date fund. I'm referring to my taxable accounts. I'm wondering, given what you said, if in taxable I should just focus on a 50/50 *contribution* rate, and let the market go where it will. If I do that, I will have 10 years of expenditures in fixed income at retirement, excluding my tax-deferred money (I guess much more if I consider the RMDs from tax-deferred after age 70.5) If I do it that way I can live off stocks when the market is up, and have 10 years of fixed income to handle big downswings. Does this make sense?

Thanks for the input. Any further thoughts would be appreciated.
I rebalance my taxable account. In fact, since I use a roboadvisor for my taxable account, it rebalances on its own, daily if need be. If I was doing it manually, I'd pick either an interval (once a quarter, every year on my birthday, whatever) and rebalance back to my target; or do what many people do and use rebalancing bands. If my AA gets more than 5% away from my target, rebalance back to my target.
Doesn't that have big tax implications? Do you rebalance with new money as much as possible?

lazydavid
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Re: Fell in Love with Fidelity

Post by lazydavid » Fri Mar 22, 2019 2:39 pm

bck63 wrote:
Fri Mar 22, 2019 2:21 pm
lazydavid wrote:
Fri Mar 22, 2019 12:51 pm
bck63 wrote:
Fri Mar 22, 2019 12:32 pm
Yes I've been thinking about that. My tax-deferred money is in the Vanguard 2030 target date fund. I'm referring to my taxable accounts. I'm wondering, given what you said, if in taxable I should just focus on a 50/50 *contribution* rate, and let the market go where it will. If I do that, I will have 10 years of expenditures in fixed income at retirement, excluding my tax-deferred money (I guess much more if I consider the RMDs from tax-deferred after age 70.5) If I do it that way I can live off stocks when the market is up, and have 10 years of fixed income to handle big downswings. Does this make sense?

Thanks for the input. Any further thoughts would be appreciated.
I rebalance my taxable account. In fact, since I use a roboadvisor for my taxable account, it rebalances on its own, daily if need be. If I was doing it manually, I'd pick either an interval (once a quarter, every year on my birthday, whatever) and rebalance back to my target; or do what many people do and use rebalancing bands. If my AA gets more than 5% away from my target, rebalance back to my target.
Doesn't that have big tax implications? Do you rebalance with new money as much as possible?
So far, except for 2018, when I sold a bunch of appreciated funds to buy a car, the tax implications have been negative. Tax Loss Harvesting for the win. :) Yes, rebalancing is happening with new money also.

But getting back to the example of the 50% drop in stocks. Let's say I started with $60k in stock and $40k in bonds. After the market tanks, I now have $30k in stock and $40k in bonds. To get back to my AA, I'm going to sell $12k in bonds and buy $12k in stock. I now have $42k in stock, and $28k in bonds, a 60/40 split. My bonds hadn't appreciated much, and I'd probably had them awhile, so the capital gains taxes are negiligible.

If on the market recovery, rebalancing with new money doesn't keep my AA in line, yes I'll wind up selling appreciated stock to buy bonds, and I'll have to pay taxes on that. But I'd much rather pay taxes because I made a ton of profit, then not have to pay taxes because I missed the opportunity for said profit.

abner kravitz
Posts: 440
Joined: Tue May 05, 2015 7:42 am
Location: Beaufort County, SC

Re: Fell in Love with Fidelity

Post by abner kravitz » Fri Mar 22, 2019 2:46 pm

I have been a big fan of Fidelity for over 20 years. Lately, concerns are creeping in. Customer Service interactions are becoming a little more hit-and-miss. I contacted them via Chat today about a corrected 1099-DIV they sent, and I swear to you all that the guy on the other end was barely literate. It was like I was chatting with a bad cable company rep. I wonder if their zero fee strategies are forcing them to cut corners on hiring, training, and development.

Topic Author
bck63
Posts: 524
Joined: Fri Sep 28, 2018 4:59 pm

Re: Fell in Love with Fidelity

Post by bck63 » Fri Mar 22, 2019 4:13 pm

lazydavid wrote:
Fri Mar 22, 2019 2:39 pm
bck63 wrote:
Fri Mar 22, 2019 2:21 pm
lazydavid wrote:
Fri Mar 22, 2019 12:51 pm
bck63 wrote:
Fri Mar 22, 2019 12:32 pm
Yes I've been thinking about that. My tax-deferred money is in the Vanguard 2030 target date fund. I'm referring to my taxable accounts. I'm wondering, given what you said, if in taxable I should just focus on a 50/50 *contribution* rate, and let the market go where it will. If I do that, I will have 10 years of expenditures in fixed income at retirement, excluding my tax-deferred money (I guess much more if I consider the RMDs from tax-deferred after age 70.5) If I do it that way I can live off stocks when the market is up, and have 10 years of fixed income to handle big downswings. Does this make sense?

Thanks for the input. Any further thoughts would be appreciated.
I rebalance my taxable account. In fact, since I use a roboadvisor for my taxable account, it rebalances on its own, daily if need be. If I was doing it manually, I'd pick either an interval (once a quarter, every year on my birthday, whatever) and rebalance back to my target; or do what many people do and use rebalancing bands. If my AA gets more than 5% away from my target, rebalance back to my target.
Doesn't that have big tax implications? Do you rebalance with new money as much as possible?
So far, except for 2018, when I sold a bunch of appreciated funds to buy a car, the tax implications have been negative. Tax Loss Harvesting for the win. :) Yes, rebalancing is happening with new money also.

But getting back to the example of the 50% drop in stocks. Let's say I started with $60k in stock and $40k in bonds. After the market tanks, I now have $30k in stock and $40k in bonds. To get back to my AA, I'm going to sell $12k in bonds and buy $12k in stock. I now have $42k in stock, and $28k in bonds, a 60/40 split. My bonds hadn't appreciated much, and I'd probably had them awhile, so the capital gains taxes are negiligible.

If on the market recovery, rebalancing with new money doesn't keep my AA in line, yes I'll wind up selling appreciated stock to buy bonds, and I'll have to pay taxes on that. But I'd much rather pay taxes because I made a ton of profit, then not have to pay taxes because I missed the opportunity for said profit.
This is very helpful. Thanks David.

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