Need help with brokerage and mutual fund

[yellow heel]

I was thinking about opening up an account to buy some mutual fund or ETF. I was looking in some Vanguard funds. This will be some what of my mid term investment for the down payment for they house. At the rate I am saving right now, I think might have enouhg in 5-7 years of saving.

Where do guys have your account at? How do you like them?

Which funds do you have (how are they performing)?

What is the goal for this account (retirement, down payment or just investing)?

[gotalkmoney]

Re: Need help with brokerage and mutual fund

Where do guys have your account at? How do you like them?

I currently have my account at firstrade.com. I chose them because they had free mutual fund investing. I love them death and wouldn't change. Their rates are very competitive and their service is great.

Which funds do you have (how are they performing)?

Right now, I'm in a really cheap mutual fund called TAVFX. As of today, I'm up about 4-5%. I bought the fund back in the spring.

What is the goal for this account (retirement, down payment or just investing)?

Right now, since I'm quite young, I either want to save up for a down payment. If I get money through other avenues, then it will defintely be fore retirement

Good luck with your investing!

[disneysteve]

Re: Need help with brokerage and mutual fund

If you are saving for a house in 5 years or so, I don't think I'd be putting that money into the stock market. Too much chance of the market taking a downturn when you need the money. A house deposit is something you want to keep safe. With money markets at 5.15% and CDs up around 5.75%, that would be where I'd suggest looking.

[Hypersion]

Re: Need help with brokerage and mutual fund

If you are in a high state tax bracket take a look at T-bills. You can buy them at http://www.treasurydirect.gov/

[meaghanchan]

Re: Need help with brokerage and mutual fund

I agree with disneysteve on keeping money you plan to use in 5-7 years in CDs or high-earning savings or money-market accounts. The stock market's just too unpredictable. You don't want to be put in a position where you're forced to 'sell low' because at the time you need the money, the market's in a downturn.

That said, I'll answer your questions for fun and for anyone else who is researching mutual funds:

Where do guys have your account at? How do you like them?
I have my account at Vanguard and I'm very pleased with them. I've had no problems, and I don't just like their customer service, I like their approach to investing. I like that they take a lot of measures to keep costs low, I like their index-heavy approach, and I like that because they're not a publically traded company, they are responsible to their investors, not to their shareholders.

Which funds do you have (how are they performing)?
The only fund I own at the moment, because I lack the funds to diversify properly, is VTSMX- Vanguard Total Stock Market Index. The 1-year return listed is 9.74%. I haven't owned it a year yet so I can't see how much it's gone up since I bought it, but I'm very happy with my investment so far.

What is the goal for this account (retirement, down payment or just investing)?
Retirement.

[risknothing]

Re: Need help with brokerage and mutual fund

can someone explain T-Bills to me?

[sweeps]

Re: Need help with brokerage and mutual fund

can someone explain T-Bills to me?

Link

[yellow heel]

Re: Need help with brokerage and mutual fund

gotalkmoney - Thanks for the tip. I'll check them out! Do they charge any fees for mutual funds?

disneysteve - Thanks for the advice. I am starting to rethink my saving strategy. I might start a new mutual fund account (not for downpayment) from scratch. And just keep the money that I have saved in a safe high yield savings account (or a short term CD since the rates are changing very often).

meaghanchan - Does Vanguard have any fee to buy or keep their funds? I read that you need at least 3000 to start and need at leas $10k to waive the annual fee... Is this true?

[yellow heel]

Re: Need help with brokerage and mutual fund

Hypersion - I will have to do more reading on the Bond stuff. Thanks! I never get this concept no matter how much I read

[meaghanchan]

Re: Need help with brokerage and mutual fund

meaghanchan - Does Vanguard have any fee to buy or keep their funds? I read that you need at least 3000 to start and need at leas $10k to waive the annual fee... Is this true?

yellow heel- Vanguard does have a $3000 minimum to start investing in most funds (their Star fund is an exeption, with a $1000 minimum). Their index funds (including the VTSMX fund I am in) charge a $10 annual maintenance fee to maintain the account if the balance is less than $10K. Their managed funds do not, I believe, charge a maintenance fee, but you would have to check the fund's prospectus to be sure.

You should also be aware (you may already be aware of this, I apologize if you are) that all mutual funds have some sort of expense ratio, meaning, the amount of money deducted from your account every year to cover fund expenses (paying managers if applicable, etc). So if you have $10K in a fund with a 2% expense ratio, you're paying $200 a year (if my math is right) for expenses. If you have $10K in a fund with a 1% expense ratio, you're paying $100 a year in expenses. And if you have a fund with an 0.2% expense ratio, you're only paying $20 a year in expenses. So you can see how important it is to look for a fund with a low expense ratio... Especially as the amount of money you have in the fund grows higher.

[disneysteve]

Re: Need help with brokerage and mutual fund

Their index funds (including the VTSMX fund I am in) charge a $10 annual maintenance fee to maintain the account if the balance is less than $10K. Their managed funds do not, I believe, charge a maintenance fee, but you would have to check the fund's prospectus to be sure.

Their managed funds charge a "low balance fee" of $10/year/fund in a nonretirement account if the fund balance is less than $2,500 or your total Vanguard account assets are less than $50,000.

Fortunately, we now have over 130K invested with them, so we are exempt from any account maintenance fees. So yes, I'm another satisfied Vanguard customer.

[gotalkmoney]

Re: Need help with brokerage and mutual fund

yellow heel -

Check out this page, https://pageserve.firstrade.com/publ...mfees_home.htm and it has most of the fees listed on that page.

Take care.