Investing Question: Which company do you use?

bmo88 · May 2016

I am interested in getting into general stock market investing.

For my ROTH IRA, I use Vanguard and like them. But I am not sure if they are the best option for general investing. I have heard of Betterment and a few others, but I am not sure if they are better/worse. Cost I guess will be the biggest driver and I would need to compare.

But I am curious what others do for general investing.

AprilZ81 · May 2016

We use Raymond James, but that is because DH's college track coach is now an investment advisor with them (not sure of his exact title but he manages our ROTHs).

I think we have a $50 annual management fee.

lbonga1 · May 2016

I don't do any investing yet aside from retirement accounts, but I use Vanguard as well. I'm pretty sure they have the lowest fees; Fidelity may be similar. From what I understand, the only difference with Betterment and the like is that the accounts are more managed in the sense that your accounts can be automatically rebalanced, they'll do tax-loss harvesting for you, and maybe some other features. But of course, those are features you're going to be paying for. You'd also still be buying the same funds/stocks, just at a higher expense ratio because of the extra features.

vlagrl35 · May 2016

I use Fidelity and like them

Xstatic3333 · May 2016

I technically have a taxable account with Fidelity, though I haven't used it much since we're not maxing out our retirement yet. I like Fidelity for its online interface and app, it's huge variety of low-cost funds, and the ability to meet with someone in person for free.

cbee817 · May 2016

We have our Roths with Fidelity- my 401k is with them as well and I like having everything in one spot (DH's 403b is with AXA.. I don't recommend them). Fidelity's online tools are good and we have a rep that comes to work a few times a year for 1:1 consulting. The 529 plans are with our state's 529 website and everything else sits in CDs/savings.

als1982 · May 2016

We have our ROTHs with Edward Jones, H's 401K is with Charles Schwab, and my 403b is TIAA. We trade individual stocks through both Charles Schwab and Edward Jones. Edward Jones is cheaper considering the amount we usually buy ($1,000 or less at a time) but Charles Schwab is more convenient, so we typically just buy through them. Right now, we are seeing a far better return on our individual stocks than the funds we own.

jtmh2012 · May 2016

I never pulled the trigger, but when I mentioned it to my advisor, she said she normally recommends E*TRADE or Scot

hoffse · May 2016

We use Fidelity for everything. I like them because when I call I can talk to a live person who is knowledgeable. The first time we did an IRA conversion (back-door Roth), I had some questions about the timing of contributions vs. the timing of the actual conversion. The person I spoke with knew exactly what I was talking about and explained the options/rules to me. It's something I could have looked up myself, but I have found that it's usually faster to just call Fidelity directly.

My 401(k) is with Vanguard and I like their investment options, but I don't like their customer service nearly as much. My very first Roth IRA was with them, and I had issues getting the 401(k) set up under my married name, even though I had moved the Roth IRA to Fidelity by that time. They had my maiden name tied to my SSN, and so now both names appear on my account. They told me "their system" doesn't allow them to remove prior names from accounts. I feel like that was pure BS from the rep I was talking to, but once my married name appeared on my 401(k) I stopped fighting with them about it. I had none of these issues with Fidelity, BTW. It took them approximately 10 minutes to change everything over to my married name when I brought in the paperwork, and my maiden name doesn't appear anywhere that I can see.

Also, we will stay with Fidelity because of the Fidelity AmEx card. It is a free card that earns 2% cash back on everything - no categories, no exclusions. Rewards are automatically deposited into one of our investment accounts every time we earn at least $50 (which is $2500 spend). I have migrated away from this card over the last couple years to focus more on travel cards, but I like having it as a back-up, and I'm coming back around to it as we start to refocus on cash back instead of building miles (TTC at the end of the year, so cash is more important in the next 12-18 months to us than miles). Psychologically, having those rewards dump into an investment account makes it more likely we will invest that money instead of just spending it. I'm pretty sure you can also direct the rewards to a Roth IRA, 529, etc.

I'm pretty sure Betterment does robo-advising, which is becoming increasingly common. It's less expensive, but more automated. I haven't looked into it much.

hoffse · May 2016

By the way, Fidelity is doing an IRA matching program right now - if you move an IRA to them, they will match a percentage of your contributions for the next 3 years. The percentage depends on the balance in your account.

I know this isn't related to your outside investments, but I have found it easiest to keep everything in one place, so thought it was worth mentioning. The match may not be high enough to make the move worth it for you guys, but it's definitely something to look at:

https://www.fidelity.com/about-fidelity/individual-investing/fidelity-introduces-ira-match

LillibetteV · May 2016

I also use Fidelity - the ability to walk in and talk to someone is very important to me. My first 401(k) was there and they made it very easy to do the rollover in an IRA. After that experience I opened our taxable account there too and couldn't be happier (well...I could if one of our mutual funds was doing better, but that's life...)

smerka · May 2016

I'm with Vanguard and my dad has been with them for a very long time. I had no issues changing to my married name with them. I did have to jump through a bunch of hoops when I took over my custodial account from my dad (my former college fund. There weren't 529 plans then) BUT I think I would have had to do the same thing elsewhere. I think I had to get something called a medallion from my bank. If you are doing mutual funds, I'd do Vanguard or Fidelity. If you want individual stocks, I'd do the one with the lowest fees assuming you want to self manage.

bmo88 · May 2016

Thanks for the suggestions so far!

I am looking to start with a small amount of investing in the general market (like $100 a month). The drawback of Vanguard is that their account requires $3,000 up front (unless it is retirement). So, that is part of the reason I am looking at other options.

I think I will consider E trade or Scot.

LillibetteV · May 2016

bmo88 said:

Thanks for the suggestions so far!

I am looking to start with a small amount of investing in the general market (like $100 a month). The drawback of Vanguard is that their account requires $3,000 up front (unless it is retirement). So, that is part of the reason I am looking at other options.

I think I will consider E trade or Scot.

Most of Fidelity's funds that I've bought are only $2,500 to start. I saved it by setting up a weekly transfer to savings and then started investing once I hit the minimum. Afterwards you can redirect the weekly transfer straight into the investment account instead of the savings account.

bmo88 · May 2016

LillibetteV: Thanks for the response. I technically have the cash in the bank to do the initial $3,000, but for some reason I don't want to start with that amount in the market. I like the idea of building up over time. But maybe that isn't the right mindset.

LillibetteV · May 2016

Before we were married my husband would do smaller amounts like you're thinking of by buying individual stocks, but I thought the fees were too much considering how little he had in there (he disagreed). Since we have to compromise on our joint taxable account we have a low-cost index fund that I prefer and an industry specific mutual fund that he prefers. "My" index fund is doing much better than the pick and choose method. If you're nervous about putting a lot in the market I'd suggest that a low fee index fund that covers a wide range of the overall market would work well for you. The index fund isn't making HUGE gains at the moment - but it is making money rather than losing 30%.

bmo88 · May 2016

LillibetteV:

I am pretty keen on the index funds and exchange traded funds. I have read up a little on dividend growth investing using value stocks. So I am considering the ProShares S&P 500 Dividend Aristocrats ETF. It holds companies like Coca Cola, Proctor & Gamble, etc.

https://www.google.com/finance?q=NYSEARCA:+NOBL&ei=tTVDV-m_F4T7jAHAuJvwCA

jtmh2012 · May 2016

bmo88 said:

LillibetteV: Thanks for the response. I technically have the cash in the bank to do the initial $3,000, but for some reason I don't want to start with that amount in the market. I like the idea of building up over time. But maybe that isn't the right mindset.

I have a Dominion Resources drip account that I started with something small as long as you made a minimum monthly investment for so many months. You could try something like that if other options don't work out for you.

vlagrl35 · May 2016

If you buy individual stocks those can be cheaper than a $2500 mutual fund. As the stock goes up you can sell your profits and buy more.

brij2006 · May 2016

We use on of Dave Ramsey's ELP's (Endorsed Local Providers).

What I like about their setup is that they are paid a higher commission on the initial investment, then a much much smaller percentage on the investment annually.

I'm glad that we decided to go this route, because he doesn't push financial products that aren't wise investments (whole life insurance, annuities, etc), and I like that he gives us total control over everything. He explains and advises, then we are able to choose if we would prefer something less aggressive.

What I also like is that he is required to take the people with only $100 to invest, per his ELP agreement with Dave Ramsey.

We have our Roth IRA's and a stand alone mutual fund with him. It is then invested into American Funds which is a pretty large company.

bmo88 · June 2016

Thanks to everyone who provided feedback.

I finally just called Vanguard and found out it was super easy to set up a brokerage account. I am going to invest in ETFs and index funds, so it's $7 a trade (regardless of number of stocks purchased). So that seems on the lower side. Also, the $3,000 minimum was only for mutual funds, which I do not want to invest in at this time.

My question to those who invest:

How often do you purchase stocks? Monthly, quarterly yearly?

Since it's $7 a trade, I think my plan is to contribute monthly to the brokerage account, but only make purchases quarterly, so that I will build up the funds and only pay about $28 a year in trades on average.

LillibetteV · June 2016

Do they charge you $7 to buy the index funds too? Or just individual stocks? Fidelity doesn't charge me a trade fee to put more into my index funds so I'd be surprised if Vanguard did (just because so many people seem to prefer Vanguard).

bmo88 · June 2016

LillibetteV: good question!

It looks like it's individual stocks or non-Vanguard ETF they charge $7. If it's a Vanguard ETF, it's free.

https://personal.vanguard.com/us/whatweoffer/stocksbondscds/feescommissions

LillibetteV · June 2016

If it's free I don't see why you wouldn't invest whenever you feel like it (monthly, quarterly, etc.) We're reworking out savings right now but the plan will be to set up a monthly auto-investment.

als1982 · June 2016

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smerka · June 2016

Vanguard encourages dollar cost averaging or investing regularly instead of trying to time the market. I would suggest doing an auto debit from your checking account at least monthly if not every pay period.

bmo88 · June 2016

@smerka: I invest monthly for my Roth IRA and have it set up that way. Unfortunately, for ETFs and other stocks, you cannot set up a monthly investment through Vanguard. I can have money transfered to my brokerage account automatically, but I will have to go in and set up the purchase every time. Not a huge deal, but just have to set a calendar hold to remember it.

jtmh2012 · June 2016

bmo88 said:

My question to those who invest:

How often do you purchase stocks? Monthly, quarterly yearly?

Short answer....it depends.

Our Roth IRAs are done annually after the calendar year rolls over in one lump sum. It's still dollar cost averaging, it's just yearly instead of monthly.

I have what I call the "pay off the house fund" that I buy monthly.

I have another fund I watch and buy whenever it drops below a certain amount.

I have another that used to be monthly, but I fell behind on it years ago and I'm just now catching up on it in bulk contributions.

Investing Question: Which company do you use?

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