OT: Vanguard Funds

[JL23]

Since we've been on the topics of retirement lately I figured I'd ask what everyone thinks of Vanguard. I like them b/c of their low fees and natural diversification, but my buddy loves them. He has his entire retirement account in 7-8 different Vanguard Funds (66 % Domestic w/Small, Medium and Large Caps evenly divided and 33 % International w/Developed and Emerging Markets evenly divided).

Personally I'm more comfortable mimicking Buffet's Berkshire Fund, taking 5-6 companies from there and 3-4 from Vanguard (or vice versa) to diversify that way. What does everyone else think ?

 

[rutgersal_rivals139582]

Buffet's track record and vanguards, speak for themselves. I think your strategy is sound. vanguard has done very well for my family.

 

[keywestRU]

I have been all in with Vanguard for 30 years or so -- mutual funds, brokerage, IRAs, even the charitable endowment and have done very well. If you go that route, I'd suggest a subscription to Dan Weiner's "Independent Adviser for Vanguard Investors" for a truly-independent evaluation of all things Vanguard and some solid conservative investment advice.

 

[RU'70]

I have been in Vanguard funds since October, 1987 (I made my first IRA contribution the Friday before the Black Monday crash!). They are excellent! I was able to get an early retirement package in 1993 and took my pension in a self directed IRA with Vanguard. Their Health Care Fund has returned an average of 16% since inception. Their Wellington Fund, the granddaddy of funds started in 1929 has returned an average of 9% per year. I was in higher risk funds early on and through the 2008 crash and recovery. I recently went to an 80%/20% bonds/stock ratio (I'm 70 +).
For the longest time they did not give advice, but had excellent information on their website to enable you to make your investment decisions. They have since offered investment advice for a fee and they also have brokerage accounts should you want to own ETFs as opposed to funds.
They are NOT a stock company--they are owned by the fund holders, and as such, their fees are very low.

 

[JL23]

RU70,

For your IRA w/Vanguard, did you go all in with the Health Care Fund and Wellington Fund, or split the account amongst a variety of different Vanguard Funds?

 

[phs73rc77gsm83]

I, too, am a big Vanguard fan and echo the comments above. Just my opinion but depending on your overall asset allocation and the size of your IRA relative to total assets, I would consider not having the entire IRA in healthcare. It's a great fund and has done very well but that might be an overweight in that sector/industry (again, depending on allocation, goals, etc). That's not saying it couldn't or shouldn't be part of your portfolio but diversification is important. My two cents, anyway.

 

[RU'70]

RU70,

For your IRA w/Vanguard, did you go all in with the Health Care Fund and Wellington Fund or split the account amongst a variety of different Vanguard Funds?

When I got my lump sum from my pension in 1993 I spread the funds out over about 10 funds. I researched the funds on Vanguard's website using their risk measures and historical returns. Over the years as I got older, I whittled down the number of funds and adjusted the mix of bonds vs stocks. Now at age 72 I am in 80% bonds and 20% stocks.
The point I was trying to make is an individual can get very good returns on his own and not have to pay fees to an advisor--and again, Vanguard fees are VERY low.

 

[OntheBanks]

I have all my investments in Fidelity for well over 30 years. However, the majority of my investments are in ETF's with a few individual stocks. The ETF's in my IRA are 2 Vanguard, 4 IShares and 1 Fidelity. I'm approaching 70 with ZERO invested in bonds. All Equity.
My last employer had my 401K in Vanguard and I despised having to use the Vanguard website. I've been retired for 7 years with ZERO in
my old 401K but I still receive a blank yearly statement from Vanguard. You can invest in Vanguard funds if you want, like I do, but I would suggest that you open your account with Fidelity.

 

[We Are RU]

I have all my investments in Fidelity for well over 30 years. However, the majority of my investments are in ETF's with a few individual stocks. The ETF's in my IRA are 2 Vanguard, 4 IShares and 1 Fidelity. I'm approaching 70 with ZERO invested in bonds. All Equity.
My last employer had my 401K in Vanguard and I despised having to use the Vanguard website. I've been retired for 7 years with ZERO in
my old 401K but I still receive a blank yearly statement from Vanguard. You can invest in Vanguard funds if you want, like I do, but I would suggest that you open your account with Fidelity.

Why don’t you like Vanguard? You aren’t a fan of their website?

This is an interesting topic to me. I have an advisor but I am thinking about going off on my own as I used to work in finance and I have a decent understanding of investing. Before making such a move I want to be sure of what I want to move my money into. Does anyone else care to share what their portfolio is made up of?

 

[RUinPinehurst]

Big fan. Now go get you some.

 

[czxqa]

I have all my investments in Fidelity for well over 30 years. However, the majority of my investments are in ETF's with a few individual stocks. The ETF's in my IRA are 2 Vanguard, 4 IShares and 1 Fidelity. I'm approaching 70 with ZERO invested in bonds. All Equity.
My last employer had my 401K in Vanguard and I despised having to use the Vanguard website. I've been retired for 7 years with ZERO in
my old 401K but I still receive a blank yearly statement from Vanguard. You can invest in Vanguard funds if you want, like I do, but I would suggest that you open your account with Fidelity.

They still send you a blank statement after all those years? Wow. I know the recordkeeping system they use. If it's annoying enough to be worth a phone call tell them your status should be 31- Terminated and Paid out. That should work.

 

[Raritan83]

Recently began moving a lot of my monthly contributions to vanguard. To say the website and customer service are atrocious is an understatement. Just in the last two weeks:
- had my cost basis set to specific identification. They somehow did average cost out of the blue. Contact customer service and told it would take two weeks to research
- have my dividends set to reinvest and recently started getting paper checks
- went to place a trade yesterday and my account (and others) were unavailable for several hours. They listed numbers to call but after 40 min on hold I hung up.

I echo the fidelity statement. Keep it simple invest in their Spartan funds or black rock etfs which have just as low expense ratios as vanguard. Their website, customer service and research tools are not even in the same world as vanguards.

Either way check out bogleheads.com. Lot of vanguard shills there but changed my viewpoint on investing.

 

[Upstream]

I have all my investments in Fidelity for well over 30 years. However, the majority of my investments are in ETF's with a few individual stocks. The ETF's in my IRA are 2 Vanguard, 4 IShares and 1 Fidelity. I'm approaching 70 with ZERO invested in bonds. All Equity.
My last employer had my 401K in Vanguard and I despised having to use the Vanguard website. I've been retired for 7 years with ZERO in
my old 401K but I still receive a blank yearly statement from Vanguard. You can invest in Vanguard funds if you want, like I do, but I would suggest that you open your account with Fidelity.

I'm just the opposite. I prefer the Vanguard website. But I guess it is what you get used to.

When my dad passed away, he had money in Fidelity and I moved it to Vanguard. I did this partly because I preferred the Vanguard website to the Fidelity website, and mostly because I wanted the money consolidated at one company. Oh, and after I moved the money out of Fidelity, they continued to send my deceased dad statements until I called them and told them to close the account.

 

[OntheBanks]

User the Brokerage firm that you feel the most comfortable with. I just am very satisfied with Fidelity.
Here is an example of numerous surveys that I've seen over the years and the results have been
consistent. You can Google 'Vanguard vs Fidelity" yourself and take a look at both websites while you're at it.
http://www.brokerage-review.com/compare/fidelity-vs-vanguard-review.aspx

 

[wheezer]

I have owned vanguard s&p 500 and explorer admiral for a long time, and have done pretty well..... Also have Franklin temple ton, but fees are much higher.

 

[rutgersal_rivals139582]

Does anyone else care to share what their portfolio is made up of?

Healthcare and Index 500 are solid places to start.

 

[JL23]

Wheezer I was trying to get Vanguard Explorer Admiral but was unable to do so - didn't even give me the option to buy. Website says 50 k minimum investment, is that the reason or because it's closed to buy right now?

 

[Upstream]

Wheezer I was trying to get Vanguard Explorer Admiral but was unable to do so - didn't even give me the option to buy. Website says 50 k minimum investment, is that the reason or because it's closed to buy right now?

You should be able to buy Investor shares, which only require a $3K investment.

 

[wheezer]

Wheezer I was trying to get Vanguard Explorer Admiral but was unable to do so - didn't even give me the option to buy. Website says 50 k minimum investment, is that the reason or because it's closed to buy right now?

-----------
I just googled it and it does have a 50,000 minimum.... i bought regular Vanguard explorer many years ago and at some point they rolled it
over to the admiral without me asking .....I probably started with an investment of $5,000 at that time, added to it over the years.

 

[phs73rc77gsm83]

-----------
I just googled it and it does have a 50,000 minimum.... i bought regular Vanguard explorer many years ago and at some point they rolled it
over to the admiral without me asking .....I probably started with an investment of $5,000 at that time, added to it over the years.

The Admiral shares have a lower expense ratio so if you have some of those, that is a good thing. Admiral class shares always have lower expense ratios than investor shares but have a high minimum, which makes sense.

 

[wheezer]

----
I thought so... interestingly enough they moved me into the admiral without me asking, and it was not considered a sale of the fund
and a new purchase.

 

[phs73rc77gsm83]

----
I thought so... interestingly enough they moved me into the admiral without me asking, and it was not considered a sale of the fund
and a new purchase.

Well again, that saved you money so don't feel bad they didn't ask you!

 

[RU2007RSLN2010]

Am I missing something but when you compare Vanguard Explorer vs the S&P500 they are consistently getting beaten by a large margin over 1, 5 and 10 year intervals.

 

[Raritan83]

----
I thought so... interestingly enough they moved me into the admiral without me asking, and it was not considered a sale of the fund
and a new purchase.

I was pretty negative about vanguard above but this is one area they shine. If you go above the admiral threshold they will auto convert you (fidelity will also do between investor and advantage shares) but what differentiates vanguard is you can also buy the ETF which has the admiral expense ratio. You are then allowed to call them and ask them to convert you to admiral when you reach the limit. So you get the lower expense the entire time.

Vanguard ETF, admiral and investor shares are just share types of the same fund which allows you to convert between share types tax free. The other advantage of that is at tax time as they can allocate between ETF and mutual fund in a way to make each investment a little more tax efficient than their competitors.

 

[czxqa]

----
I thought so... interestingly enough they moved me into the admiral without me asking, and it was not considered a sale of the fund
and a new purchase.

Once you hit the breakpoint, they're required to process a share class conversion.

 

[JL23]

I put in VEXRX for the Admiral but it wouldn't give me the option to buy, is this the correct one?

 

[wheezer]

Am I missing something but when you compare Vanguard Explorer vs the S&P500 they are consistently getting beaten by a large margin over 1, 5 and 10 year intervals.

-------
The explorer fund has not done well over the past few years, pulling down all the yearly averages you mention, and looks pretty bad when compared to the s& p

I would think the vanguard s&p index fund mirrors the actual s&p and results are better over that period...

I am not happy with the explorer results because of this, but have not shifted out of it as I am usually a buy and hold investor.... Probably a mistake on my part...... I probably would only add to the s&p fund with new money

 

[RUinPinehurst]

Buy and mold? Never hesitate to make changes should the underlying dynamics of the vehicle change, i.e. the original "attractiveness" of that investment is no longer there or as strong, comparable to what else is available to you. Your money could be growing elsewhere. IMHO.

 

[wheezer]

Buy and mold? Never hesitate to make changes should the underlying dynamics of the vehicle change, i.e. the original "attractiveness" of that investment is no longer there or as strong, comparable to what else is available to you. Your money could be growing elsewhere. IMHO.

----
I hear you....... I an invested in about eight funds each with various holdings...... Explorer is one that has small caps and that area might snap back, and my other funds are not situated as such....... I could easily move into the hot fund now and I could be late to the party.

You still are probably right and will give it some thought, even though it is not my usual way.

 

[gmay8]

I just tried to buy into Vanguard Wellington Fund Investor Shares (VWELX) through my capital one 360 investment account, and I was told this fund isn't currently allowing new purchases into the fund. I had been doing some research and this was the fund I settled on, but now back to square one.

 

[Raritan83]

I just tried to buy into Vanguard Wellington Fund Investor Shares (VWELX) through my capital one 360 investment account, and I was told this fund isn't currently allowing new purchases into the fund. I had been doing some research and this was the fund I settled on, but now back to square one.

I believe it may only be available through Vanguard. Open a Vanguard account, fund your dollars you want to invest and no need to head back to square one.

 

[jreinsdorf]

I`m 41 and have been with Vanguard in their Total Stock Market Index Fund for like 15 years or so. I`d say its doing alright but in reality I have nothing to compare it to. Finance has always been a language I dont understand. I can talk healthcare and medicine all day long but if you ask me when should I transition to %80 stocks and %20 bonds I have no freaking clue.

 

[phs73rc77gsm83]

I`m 41 and have been with Vanguard in their Total Stock Market Index Fund for like 15 years or so. I`d say its doing alright but in reality I have nothing to compare it to. Finance has always been a language I dont understand. I can talk healthcare and medicine all day long but if you ask me when should I transition to %80 stocks and %20 bonds I have no freaking clue.

I respectfully suggest and highly recommend that you learn as much as you can about personal finance. Even if you want to find a trusted financial advisor you want to be able to ask appropriate questions that provide a sort of check and balance. You mention you have nothing to compare "it" and that is a problem. You need to learn enough over time to be able to put news, opinions, advise etc into your specific context. There's too much at stake to be financially illiterate, no offense.

As far as total stock, that gives good diversification, at least in terms of US equities. Of course there are no bonds there and international exposure is limited to US companies with a foreign presence. How much you should be in equities vs bonds, and other diversification and asset allocation questions depends on your personal risk tolerance, objectives, and overall financial situation. There are some fundamental principles you might adhere to but it's not an exact science and, as stated, depends on your circumstances. There are some great sites and forums online where you can begin to learn and you'll adjust your own filters in terms of credibility, applicability, etc. as your knowledge base grows. Plus those sites (e.g., boggle heads, Morningstar, many others) don't have incessant arguing about the starting QB, stars, and the weather... They may, however, argue about growth vs value, equities vs debt, and other topics.

 

[jreinsdorf]

I respectfully suggest and highly recommend that you learn as much as you can about personal finance. Even if you want to find a trusted financial advisor you want to be able to ask appropriate questions that provide a sort of check and balance. You mention you have nothing to compare "it" and that is a problem. You need to learn enough over time to be able to put news, opinions, advise etc into your specific context. There's too much at stake to be financially illiterate, no offense.

As far as total stock, that gives good diversification, at least in terms of US equities. Of course there are no bonds there and international exposure is limited to US companies with a foreign presence. How much you should be in equities vs bonds, and other diversification and asset allocation questions depends on your personal risk tolerance, objectives, and overall financial situation. There are some fundamental principles you might adhere to but it's not an exact science and, as stated, depends on your circumstances. There are some great sites and forums online where you can begin to learn and you'll adjust your own filters in terms of credibility, applicability, etc. as your knowledge base grows. Plus those sites (e.g., boggle heads, Morningstar, many others) don't have incessant arguing about the starting QB, stars, and the weather... They may, however, argue about growth vs value, equities vs debt, and other topics.

Thanks for the comments/advise. I did roll over a sum of money that was sitting in an old employer 403B to a 401K with a financial adviser. He has looked over all of my investments (Vanguard IRA and current employer 401K) and after the obligatory insurance sales pitch agreed that I seem to be doing everything I should be doing. But its still a foreign language to me. I understand risk tolerance and to some degree diversification but I would never trust myself to allocate funds without guidance. I just go with the estimated year of retirement plan and allow for risk to shift accordingly.

 

[phs73rc77gsm83]

Thanks for the comments/advise. I did roll over a sum of money that was sitting in an old employer 403B to a 401K with a financial adviser. He has looked over all of my investments (Vanguard IRA and current employer 401K) and after the obligatory insurance sales pitch agreed that I seem to be doing everything I should be doing. But its still a foreign language to me. I understand risk tolerance and to some degree diversification but I would never trust myself to allocate funds without guidance. I just go with the estimated year of retirement plan and allow for risk to shift accordingly.

Okay, in my opinion it's good to control or minimize cost, without compromising investment strategy. I'm a DIY person but I do see a role for advisors for certain situations. There is no quick answer without context. By way of example, the "...estimated year of retirement plan..."can be okay but, by way of example, look at a hypothetical example of someone who is 45 with $2 million in investable assets and no debt, kids college paid for, versus a 45 year old with $25k in credit card debt, $50k in a 401k, five kids, etc. so my point is that age in and of itself is not the sole determinant.

 

[RUnTime_rivals654121]

Since we've been on the topics of retirement lately I figured I'd ask what everyone thinks of Vanguard. I like them b/c of their low fees and natural diversification, but my buddy loves them. He has his entire retirement account in 7-8 different Vanguard Funds (66 % Domestic w/Small, Medium and Large Caps evenly divided and 33 % International w/Developed and Emerging Markets evenly divided).

Personally I'm more comfortable mimicking Buffet's Berkshire Fund, taking 5-6 companies from there and 3-4 from Vanguard (or vice versa) to diversify that way. What does everyone else think ?

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