Thursday, April 13, 2006

Thanks Vanguard, that was easy...

Yesterday I opened up a Roth IRA @ Vanguard.com, and initiated a move of my current Roth IRA from my current brokerage firm Commerce Capital Markets. The entire process was done online, and in under 15 minutes. It was so easy, that I felt uneasy. I'm used to dealing w/ financial advisors face to face when it comes to my Roth. I've only had two brokerages before Vanguard. I've chosen Vanguard from all of the other discount brokers out there because of thei reputation among the various financial websites, the pf blogosphere, and various reviews I've come accross. They also have a few advantages that my current broker doesn't. They allow me to open an account online, transfer money from any bank account w/ a routing number, a wide variety of low cost index funds, ETF's, bonds, CD's, etc. I will be getting rid of the fairy new, under performing, loaded, and expensive Alliance Bernstein Balance Wealth Strat B fund (ABWBX) and acquiring the fairly new, nicely performing, no loads and low cost Vanguard Target Retirement 2045 index fund (VTIVX). I have to snail mail an authorization form for all this to be completed, so I'll be anxiously waiting in the meantime...

1 comment:

Barry Barnitz said...

Hi:

As a fellow, long-term investor with Vanguard, I can assure you that the miniscule expense loadings of your portfolio will provide bountiful benefits to you and your family.

The difference between a .20% expense ratio, and an approximate .30% to .60% total expense (trading and tax cost) drag on your Vanguard porfolio and the 3.00% to 4.00% total expense drag of actively managed brokered accounts will result in you accumulating close to 96% of the return available in the market, as opposed to you giving 70% to 80% of the return to the brokerage.

If you would like to share thoughts with other Vanguard investors I would urge you to drop in daily with the Morningstar Vanguard Diehards.
Guide to the Vanguard Diehards

My blog is geared more to the experienced index fund investor, but you may find it interesting.
Financial Page.

regards, and best wishes,
Barry