Free Brokerage For the Stock Portion?
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Re: Free Brokerage For the Stock Portion?
I am happy with tradeking.
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nomamesbuey
Vanguard
I've been happy with Vanguard Brokerage (VBS) thus far, been customer for 2 months.
I love the "credit union-ish", "customer owned" nature of Vanguard. I feel it's less likely that Vanguard will do radical changes to their pricing & offerings over time. Apparently Vanguard, whose founder John Bogle having invented index stock funds (in the 1970s?), has a stable pattern of low pricing for stock index mutual funds going back for decades.
I looked at WellsTrade from Wells Fargo, which currently is a better deal than Vanguard since one gets 100 annual free trades. However, brokerage is not WF's core business, so I was worried that they could randomly nix this feature at any time. Plus, with the inadequate bipartisan Financial Industry (non) reform of 2010, where not much changed, I worry that a 2B2F bank could possibly using one's assets as collateral in their own house account leveraged speculation in "toxic assets" such as "CDO squared" of mortgage related bonds or some such. AFAICT Vanguard does not use customer assets as collateral for their own house account speculation; Vanguard does not do house account speculation period.
With Vanguard, worst case scenario based on minimum assets, you're paying $20 per year annual account fee (if < $50K in Vanguard funds, whether mutual fund or ETF) & $7/trade of non-Vanguard stock, up to 25 trades in a calendar year, which should suffice for HBPP-type investors, even those with a variable port (VP).
Vanguard mutual funds & ETFs do not charge a trading fee.
For traditional HBPP
stock - VTI - free trade (note if you diverge from traditional Harry Browne/craigr approach, there are US subsectors, such as VBR for small value, etc. If you want international, VEA for non-US rich countries, VWO for emerging countries, & VSS for non-US mid/small cap should meet your requirements). One could alternatively use the index mutual funds, VTSMX instead of VTI.
bond - per the MediumTex suggestion, 50% EDV & 50% VUSTX approximates, in bond duration & maturity, TLT or direct purchase of a 30 yr US Treasury bond. EDV & VUSTX have no trading fee. Note, when rebalancing from another asset into a Vanguard mutual fund like VUSTX, one needs to wait 3 trading days for the trade to settle & the funds to enter the sweep account VMMXX, then 1 addl trading day to "Exchange" the funds out of VMMXX & into VUSTX. This is a minor inconvenience that would negligibly effect your returns, yet it should still be stated.
OTOH - 1 can buy the TLT for $7 fee, or the US 30 yr Treas bond (or ladder of bonds) directly, apparently $10 to buy new bond, & $40-75 to buy existing bond, & $40-75 to sell bond. I would guess that US Treas bond would be considered a non-Vanguard asset in terms of counting your $50K in Vanguard assets, similar to the treatment of say TLT or SGOL.
cash - SHY for $7 fee. Vanguard does have some funds that are mostly short term US treasuries, but have some "junk" like Freddie Mac or Tennessee Valley Authority bonds, which would be diverging from HBPP/craigr approach. Also one could choose to hold part/all of the cash outside of Vanguard, for instance using I-Bonds US Savings Bonds.
gold - SGOL (or GLD, IAU, etc) for $7 fee.
I love the "credit union-ish", "customer owned" nature of Vanguard. I feel it's less likely that Vanguard will do radical changes to their pricing & offerings over time. Apparently Vanguard, whose founder John Bogle having invented index stock funds (in the 1970s?), has a stable pattern of low pricing for stock index mutual funds going back for decades.
I looked at WellsTrade from Wells Fargo, which currently is a better deal than Vanguard since one gets 100 annual free trades. However, brokerage is not WF's core business, so I was worried that they could randomly nix this feature at any time. Plus, with the inadequate bipartisan Financial Industry (non) reform of 2010, where not much changed, I worry that a 2B2F bank could possibly using one's assets as collateral in their own house account leveraged speculation in "toxic assets" such as "CDO squared" of mortgage related bonds or some such. AFAICT Vanguard does not use customer assets as collateral for their own house account speculation; Vanguard does not do house account speculation period.
With Vanguard, worst case scenario based on minimum assets, you're paying $20 per year annual account fee (if < $50K in Vanguard funds, whether mutual fund or ETF) & $7/trade of non-Vanguard stock, up to 25 trades in a calendar year, which should suffice for HBPP-type investors, even those with a variable port (VP).
Vanguard mutual funds & ETFs do not charge a trading fee.
For traditional HBPP
stock - VTI - free trade (note if you diverge from traditional Harry Browne/craigr approach, there are US subsectors, such as VBR for small value, etc. If you want international, VEA for non-US rich countries, VWO for emerging countries, & VSS for non-US mid/small cap should meet your requirements). One could alternatively use the index mutual funds, VTSMX instead of VTI.
bond - per the MediumTex suggestion, 50% EDV & 50% VUSTX approximates, in bond duration & maturity, TLT or direct purchase of a 30 yr US Treasury bond. EDV & VUSTX have no trading fee. Note, when rebalancing from another asset into a Vanguard mutual fund like VUSTX, one needs to wait 3 trading days for the trade to settle & the funds to enter the sweep account VMMXX, then 1 addl trading day to "Exchange" the funds out of VMMXX & into VUSTX. This is a minor inconvenience that would negligibly effect your returns, yet it should still be stated.
OTOH - 1 can buy the TLT for $7 fee, or the US 30 yr Treas bond (or ladder of bonds) directly, apparently $10 to buy new bond, & $40-75 to buy existing bond, & $40-75 to sell bond. I would guess that US Treas bond would be considered a non-Vanguard asset in terms of counting your $50K in Vanguard assets, similar to the treatment of say TLT or SGOL.
cash - SHY for $7 fee. Vanguard does have some funds that are mostly short term US treasuries, but have some "junk" like Freddie Mac or Tennessee Valley Authority bonds, which would be diverging from HBPP/craigr approach. Also one could choose to hold part/all of the cash outside of Vanguard, for instance using I-Bonds US Savings Bonds.
gold - SGOL (or GLD, IAU, etc) for $7 fee.
Re: Free Brokerage For the Stock Portion?
I've got accounts at thinkorswim and zecco. I'm happy with both. Zecco has had some growing pains. I'm still satisfied.
At thinkorswim I get 3 free mutual fund trades/month + free gainskeeper
At zecco I get 10 free stock/etf trades/month. I pay for gainskeeper (~$50/year)
For my Roth IRA, I have it at thinkorswim because they don't charge an account fee for an IRA where zecco does.
If they change fees to the point that you want to leave, you can do an ACAT transfer to a new brokerage and not incur the taxes from selling.
At thinkorswim I get 3 free mutual fund trades/month + free gainskeeper
At zecco I get 10 free stock/etf trades/month. I pay for gainskeeper (~$50/year)
For my Roth IRA, I have it at thinkorswim because they don't charge an account fee for an IRA where zecco does.
If they change fees to the point that you want to leave, you can do an ACAT transfer to a new brokerage and not incur the taxes from selling.
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SmallPotatoes
- Senior Member
- Posts: 141
- Joined: Fri Jun 04, 2010 10:25 am
Re: Free Brokerage For the Stock Portion?
I've always heeded the adage 'you get what you pay for'. While Lowering costs is chief among investors these days I'm okay paying an institution like Vanguard a little more for the reputation they hold in the investment world. Anyhow, no brokerage firm is absolutely free. They make ends meet somewhere and I'm happy to have it up front in the open.
Re: Free Brokerage For the Stock Portion?
For some reason, when I was comparing brokerages about 2 years ago, I decided to go with zecco and thinkorswim (as I mentioned previously) instead of Vanguard. Because of this thread I was just reviewing their cost structure and it does look very appealing. Probably not enough difference to justify switching right now but maybe with future funds.
How is the tax/cost basis tracking at Vanguard? Do they allow you to sell specific lots of shares or only first in first out? The tax tracking is a major consideration for me, second only to total cost.
How is the tax/cost basis tracking at Vanguard? Do they allow you to sell specific lots of shares or only first in first out? The tax tracking is a major consideration for me, second only to total cost.