Gyroscopic Investing

Wow, $3K opening minimum PER FUND???

There goes my autoinvest plan into 10 separate Vanguard funds.

Does anyone know of a way around it or an alternative solution?

Their stated philosophy is to minimize complexity and transaction costs. They'd rather have you lump everything into one fund-of-funds, or maybe a three-fund portfolio.

The only workarounds are things I expect you've already decided not to do: streamline to fewer funds, replace some of the individual funds with fund-of-funds, or use Vanguard ETFs instead of mutual funds.

What's the advantage of a mutual fund over an ETF again?

Xan wrote:What's the advantage of a mutual fund over an ETF again?

The autoinvest.

They do offer their ETF's commission free so I guess that will have to do if I can match their funds to the ETF's.

I was trying to lower my workload, not bloody increase it.

I doubt any of their funds-of-funds are suitable, but I will take a look.

Vanguard sucks double! They don't have any ETF's that map to their precious metals or junk bond funds. So I checked the commission-free ETF lists at the other brokers. Schwab and TDA map to all but one; Fidelity maps to all but two; E-Trade maps to all but four. TDA actually offers up the Vanguard ETF's themselves in most cases. But TDA has no precious metals whereas Schwab has no short term corporate bonds.

So... I'll pull a Sophie and use the TLT accumulator at Fidelity and free up Schwab for the precious metals ETF.

MachineGhost wrote:But TDA has no precious metals whereas Schwab has no short term corporate bonds.

Not sure exactly what you are looking to do, MG, but you can buy IAU through TDA.

Have been personally very frustrated with Fidelity recently as they seem unable to open a damn Roth account for our daughter. They've asked for several documents (government ID, SS card scan & W-9) THREE times. The first time the excuse was blaming in on the ol' unreliable US Mail. Now it's "the fax machine is located in the back room and there does tend to be a lag time." Just terrible. Now 18 days into this ordeal. But "we're sorry for your frustration and is there anything else we can help you with today?"

What's the correct fucking smiley face?

PS. Have a good day everyone.

Hey MG, you lost me a couple threads back. Why do you want precious metals and junk bond funds?

I'm really surprised at Barrett's Fidelity story. They've always had customer service as their strong suit. I was planning to help my niece open a Roth account this summer, but it sounds like Vanguard would be a better option. Barrett, best of luck with them and hope you can keep your cool in this heat!

sophie wrote: I'm really surprised at Barrett's Fidelity story. They've always had customer service as their strong suit. I was planning to help my niece open a Roth account this summer, but it sounds like Vanguard would be a better option. Barrett, best of luck with them and hope you can keep your cool in this heat!

Prior to now I have been very happy with Fidelity's customer service as well. Said daughter is now out of the country for a month so I can't do anything until she returns. Alas, we are talking about a small startup amount and it seems assets are pricey at the moment. I'll stick with Fidelity. Just trying to get the kid understanding money/saving at an early age (and get the money she has earned from working the hell out of her hands!)

sophie wrote:Hey MG, you lost me a couple threads back. Why do you want precious metals and junk bond funds?

I'm diversifying my equity exposure for my core layer (beyond GB style tilting, though I might do that too since it is a small tweak). I should have been more specific -- I was talking about precious metals equity funds not bullion.

Also, I think you can set up some kind of auto-invest with commission-free ETFs. Certainly free dividend reinvestment with cost-basis tracking.

You better be sure because I'm halfway pushing the green GO button. So who exacty offers this for ETF's???

It's interesting how Vangaurd screws you over with a $7K difference for almost 3 times the management fee on the same index mutual fund. Seriously? I really doubt economies of scale are operating on such a pittance.

Xan wrote:What's the advantage of a mutual fund over an ETF again?

Price is less volatile - don't have to pay extra to ensure 'market' price is really 'market' price.

Personally don't like ETFs -- Gold is my only ETF.

And yeah, VG only has a few funds sub-3k (Star - active funds....), although don't they have lower if auto-invest a certain amount?
And also lower for IRA.

Dieter wrote:

Xan wrote:What's the advantage of a mutual fund over an ETF again?

Price is less volatile - don't have to pay extra to ensure 'market' price is really 'market' price.

Also, when you buy funds directly from the sponsor (Vanguard), there is slightly less counterparty risk since there is no stock exchange in the mix. All things being equal I prefer mutual funds over ETFs for this reason. But only slightly.

Dieter wrote:

Xan wrote:What's the advantage of a mutual fund over an ETF again?

Price is less volatile - don't have to pay extra to ensure 'market' price is really 'market' price.

Personally don't like ETFs -- Gold is my only ETF.

And yeah, VG only has a few funds sub-3k (Star - active funds....), although don't they have lower if auto-invest a certain amount?
And also lower for IRA.

Interesting you bring that up. I was pondering a few hours ago if the "smoothness" of the price of mutual funds was superior for technical analysis over a perhaps an "emotional" ETF.

It's very interesting that Wellington beats any tilting and slicing but 100% into VTSMX since 1985. I almost thought I found a single fund panacea (drat!), but it's obviously declining yields at play.

Since 1985:


Since 1972:

MachineGhost wrote:Wow, $3K opening minimum PER FUND???

There goes my autoinvest plan into 10 separate Vanguard funds.

Does anyone know of a way around it or an alternative solution?

Vanguard has always had a minimum initial investment per mutual fund (usually a few thousand dollars). That hasn't changed.

Once your initial minimum investment has been made, you can auto-invest any small amount you want. That hasn't changed.

Not sure what the problem is?

Tortoise wrote:Not sure what the problem is?

I don't have $30K to put into 10 funds just to autoinvest small bits into each?

MangoMan wrote:After further investigation, it looks like auto-invest is only for mutual funds.

Thank you, kind sir!

Anyway, I'm going to nix the 10 fund idea since there doesn't appear to be any advantage in "diworsification". I really like the concept of spreading your bets widely, but if it doesn't outperform a much simpler alternative, what's the point?

I'm surprised its actaully hard to find an all equity portfolio without fixed income and other risk control measures. Does anyone have any suggestions for an all equity portfolio that beats 100% into VTSMX or VFINX? I mean, besides the enhanced Golden Butterfly tweak.

I picked up Wellesley today (thanks, Reub!) at Vanguard primarily for sovereign risk diversification with the corporate bonds. I did not know that they focus on high yield and dividend growers for the stock portion, so that is very nice and useful!

All that is left to do now is round out my core portfolio allocation (10%) and that is what the 10-funds are intended for -- if I decide diworsification is indeed better than concentration. The under performance is really bad except during the last 15 years. It is a question of "would you have been able to do it back yonder" vs now.

MachineGhost wrote:I picked up Wellesley today (thanks, Reub!) at Vanguard primarily for sovereign risk diversification with the corporate bonds. I did not know that they focus on high yield and dividend growers for the stock portion, so that is very nice and useful!

Been happy with my Wellesley.

Wasn't Vanguard supposed to merge the separate Mutual Fund and Brokerage accounts? I still have them both.

MachineGhost wrote:Wasn't Vanguard supposed to merge the separate Mutual Fund and Brokerage accounts? I still have them both.

Mine have been merged. Months ago if I recall.