Oy vey [Lessons learned - Market orders, freezing your credit report]

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jsaver
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Oy vey [Lessons learned - Market orders, freezing your credit report]

Post by jsaver » Tue Sep 10, 2019 3:46 pm

I recently created three headaches for myself, so let these serve as a cautionary tales.

Headache 1. I recently wanted to swap out a mutual fund held in my Vanguard Roth IRA to an ETF. I sold all of my shares in the mutual fund, then placed an order for the ETF. The ETF order was placed while the market was closed. I used Vanguard's calculator to figure out the desired number of shares based on the ETF closing price. I placed a market order assuming (oops) the order would not complete if I didn't have enough money in the account to pay for the shares. WRONG. The ETF price increased and the order went through, leaving the account owing about $250. Since it's a Roth IRA I can't add any funds. I assume I have to sell enough shares of the ETF to cover the shortage, but I'm waiting to hear back from Vanguard what my options are.

Lesson learned: always use limit orders to purchase ETF shares.

Headache 2. I froze all my credit reports some time ago. I recently logged into Equifax to unfreeze and was prompted about adding a fraud alert. For some reason, I decided to do so. This was a mistake. An initial fraud alert expires after 1 year. It's not possible to delete the alert before that via Equifax's web site. To cancel, you have to do so over the phone or by mail. I tried to do it over the phone, but the Equifax phone system is unable to authenticate me. So I'm left with mail. Or wait a year till it expires. Ugh. (BTW, the alert works. I unfroze my report to sign up for new credit cards and a checking account. All of the financial institutions involved called me back at the number associated with the alert before creating the accounts.)

Lesson learned: Removing a fraud alert is more difficult than unfreezing, so don't place it unless you think you really need it. Also, when you create an alert, it's forwarded to the other credit reporting agencies.

Headache 3. You can't create a mySocialSecurity account if your Equifax report is frozen or if it has an alert.

Lesson learned: Create your mySocialSecurity account before freezing your Equifax report or adding an alert. That said, I did try to create my account before I froze my reports and got the message that "We cannot create an account for the Social Security number you entered." I called in today to see if there was any issue with my SS# besides the freeze/alert and was given a comical 55-minute estimated hold time. I hung up. I'm pretty sure I'm just going to have to visit my SS office on this one.

batpot
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Re: Oy vey

Post by batpot » Tue Sep 10, 2019 4:02 pm

jsaver wrote:
Tue Sep 10, 2019 3:46 pm
I recently created three headaches for myself, so let these serve as a cautionary tales.

Headache 1. I recently wanted to swap out a mutual fund held in my Vanguard Roth IRA to an ETF. I sold all of my shares in the mutual fund, then placed an order for the ETF. The ETF order was placed while the market was closed. I used Vanguard's calculator to figure out the desired number of shares based on the ETF closing price. I placed a market order assuming (oops) the order would not complete if I didn't have enough money in the account to pay for the shares. WRONG. The ETF price increased and the order went through, leaving the account owing about $250. Since it's a Roth IRA I can't add any funds. I assume I have to sell enough shares of the ETF to cover the shortage, but I'm waiting to hear back from Vanguard what my options are.

Lesson learned: always use limit orders to purchase ETF shares.
Couldn't you have used a % instead of $?

DaftInvestor
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Re: Oy vey

Post by DaftInvestor » Tue Sep 10, 2019 4:09 pm

Thanks for sharing. #3 was discussed here before but so much is...
With so many of us now having our credit reports frozen I am surprised when you click "Create an Account" on SSA.GOV it doesn't simply state "Be sure to unfreeze your Equifax credit report before proceeding". All loans, banks, etc. should start doing this - pain having to be rejected first then have to call in and see which to unfreeze to proceed. (In the two cases I've had to unfreeze - I simply did all 3 just to be safe - luckily it only takes a few minutes).

khh
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Re: Oy vey

Post by khh » Tue Sep 10, 2019 4:22 pm

jsaver wrote:
Tue Sep 10, 2019 3:46 pm
Headache 3. You can't create a mySocialSecurity account if your Equifax report is frozen or if it has an alert.

Lesson learned: Create your mySocialSecurity account before freezing your Equifax report or adding an alert.
Is there any security to be gained by creating an online SS account , rather than just letting the Equifax freeze do its job?

Jack FFR1846
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Re: Oy vey

Post by Jack FFR1846 » Tue Sep 10, 2019 4:32 pm

Were you going from a Vanguard MF to the equivalent ETF or to something completely different? If equivalent, like VTSAX to VTI, you don't have to sell anything. Vanguard will do a conversion. And if you call Vanguard and they say you can't, then send you 2 publications supporting that you can't, come back here to get the double secret telephone number to get correct answers, rather than fake answers using alternative facts to back them up.
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texasdiver
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Re: Oy vey

Post by texasdiver » Tue Sep 10, 2019 4:34 pm

khh wrote:
Tue Sep 10, 2019 4:22 pm
jsaver wrote:
Tue Sep 10, 2019 3:46 pm
Headache 3. You can't create a mySocialSecurity account if your Equifax report is frozen or if it has an alert.

Lesson learned: Create your mySocialSecurity account before freezing your Equifax report or adding an alert.
Is there any security to be gained by creating an online SS account , rather than just letting the Equifax freeze do its job?
If you have multiple jobs it is good practice to make sure your social security statement corresponds to what you believe you have earned over the years. Much easier to make corrections now than in 20 years when companies and employers and records may have disappeared.

Checking your SS account also may tell you if anyone is fraudulently using your number for identity theft.

I'm not sure what you gain by being wilfully ignorant of your official earnings history.

Topic Author
jsaver
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Re: Oy vey

Post by jsaver » Tue Sep 10, 2019 4:37 pm

Jack FFR1846 wrote:
Tue Sep 10, 2019 4:32 pm
Were you going from a Vanguard MF to the equivalent ETF or to something completely different? If equivalent, like VTSAX to VTI, you don't have to sell anything. Vanguard will do a conversion. And if you call Vanguard and they say you can't, then send you 2 publications supporting that you can't, come back here to get the double secret telephone number to get correct answers, rather than fake answers using alternative facts to back them up.
I was going from VFORX to VSGX. They are not equivalent.

Topic Author
jsaver
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Re: Oy vey

Post by jsaver » Tue Sep 10, 2019 4:39 pm

khh wrote:
Tue Sep 10, 2019 4:22 pm
Is there any security to be gained by creating an online SS account , rather than just letting the Equifax freeze do its job?
Unrelated. I wanted to double-check my earnings.

Topic Author
jsaver
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Re: Oy vey

Post by jsaver » Tue Sep 10, 2019 4:48 pm

batpot wrote:
Tue Sep 10, 2019 4:02 pm
jsaver wrote:
Tue Sep 10, 2019 3:46 pm
Lesson learned: always use limit orders to purchase ETF shares.
Couldn't you have used a % instead of $?
Purchasing an ETF or stock can only be done in number of shares. You have to use a limit price to prevent paying more than you have funds available. Vanguard does actually tell you this in the fine print. Since this account has no margin though, I guess I still didn't expect the purchase to go through. My mistake.

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RickBoglehead
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Re: Oy vey

Post by RickBoglehead » Tue Sep 10, 2019 5:19 pm

Simply temporarily unfreeze the Equifax account, then open the Social Security account.
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22twain
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Re: Oy vey

Post by 22twain » Tue Sep 10, 2019 9:47 pm

RickBoglehead wrote:
Tue Sep 10, 2019 5:19 pm
Simply temporarily unfreeze the Equifax account, then open the Social Security account.
Or go to your local SS office (make an appointment) and bring sufficient ID. I used my passport and driver's license. I killed two birds with one stone on that visit, by applying for Medicare, the main reason for that visit. If I had already had a SS account, I could have applied for Medicare online.
My investing princiPLEs do not include absolutely preserving princiPAL.

AlohaJoe
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Re: Oy vey

Post by AlohaJoe » Tue Sep 10, 2019 9:57 pm

jsaver wrote:
Tue Sep 10, 2019 3:46 pm
Lesson learned: always use limit orders to purchase ETF shares.
The lesson you should have learned is: Don't place market orders when the market is closed.

There's nothing wrong with placing market orders for most ETFs a Boglehead is likely to hold.

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Re: Oy vey [Lessons learned - Market orders, freezing your credit report]

Post by LadyGeek » Wed Sep 11, 2019 10:48 am

This thread is now in the Personal Finance (Not Investing) forum (mostly about freezing your credit report). I also retitled the thread for clarity.
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Topic Author
jsaver
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Re: Oy vey [Lessons learned - Market orders, freezing your credit report]

Post by jsaver » Wed Sep 11, 2019 11:19 am

jsaver wrote:
Tue Sep 10, 2019 3:46 pm
I assume I have to sell enough shares of the ETF to cover the shortage, but I'm waiting to hear back from Vanguard what my options are.
This was indeed the case. Vanguard's response:
If you're unable to contribute to this account to cover the debit, you'll need to sell an appropriate amount of shares of [the ETF] to resolve this. Please take care when submitting the trade to ensure that the amount is enough to at least settle the debit amount in each account; you should attempt to place this trade while the market is open to have the best chance of estimating the shares required to resolve this.

Please note that this action will constitute a trade violation in your accounts known as a freeride. Freeriding occurs when the same security is bought and sold without sufficient settled funds to cover the original purchase. As a result of this trade violation, a 90-day funds-on-hand restriction will be placed on your accounts. This does not prohibit you from trading in general, but during this period you may only purchase securities in these accounts if there are sufficient “settled” funds in this account. Settled funds include assets in your money market settlement fund that have cleared our seven-day collectability hold, cash from bond and certificate of deposit maturities, and proceeds from the sale of securities that are settling that day. This amount is adjusted for any open orders and the funds must remain available until the settlement date of your trade. Three 90-day restrictions within a rolling 52-week period will lead to a one-year account restriction, effective from the start of your third 90-day restriction. The Vanguard website will display your settled funds available during the restriction period.
Again, lesson learned: read the fine print, use limit orders, especially if placing orders when market is closed in a retirement account where you can't add funds.

gtd98765
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Re: Oy vey [Lessons learned - Market orders, freezing your credit report]

Post by gtd98765 » Wed Sep 11, 2019 12:20 pm

Is there any security to be gained by creating an online SS account , rather than just letting the Equifax freeze do its job?
Yes there is!

KrebsOnSecurity has long warned readers to plant your own flag at the my Social Security online portal of the U.S. Social Security Administration (SSA) — even if you are not yet drawing benefits from the agency — because identity thieves have been registering accounts in peoples’ names and siphoning retirement and/or disability funds. This is the story of a Midwest couple that took all the right precautions and still got hit by ID thieves who impersonated them to the SSA directly over the phone.
https://krebsonsecurity.com/2018/01/reg ... -guard-up/

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