[Buying S&P 500 Index Fund - Fidelity or Vanguard?]

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6d1v7x3
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by 6d1v7x3 »

Does anyone else think I should be looking at Schwab as well? What's the best bonus out there right now? By the way I've decided to go with a mutual fund for simplicity's sake.
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ruralavalon
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by ruralavalon »

6d1v7x3 wrote: Sat Jul 24, 2021 5:28 pm Does anyone else think I should be looking at Schwab as well? What's the best bonus out there right now? By the way I've decided to go with a mutual fund for simplicity's sake.
Vanguard, Fidelity and Schwab are all good choices, it's largely a matter of personal preference. My personal preference is Vanguard. In my own experience their customer service has always been prompt, courteous, and professional.

Schwab does not offer a total international stock index fund or a small-cap value index fund. Both Vanguard and Fidelity do.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
muffins14
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by muffins14 »

Lionel Hutz wrote: Sat Jul 24, 2021 7:22 am Mutual fund vs ETF:
ETF: in general the ETF is likely more tax efficient by a hair.
Mutual fund: far far simpler - you can can sell dollars where ETF is only whole shares, you can do automatic investing where ETF must be manual purchases, and so on.

So if you value simplicity more than a slight edge in performance (re: ETF tax efficiency), go with the mutual fund.

Vanguard vs Fidelity, it really doesn’t matter. Fidelity has the zero fee fund I believe but Vanguard’s is so ridiculously cheap (0.04%) that the difference is negligible. So choose which firm you’d rather work with.
Just as an FYI, you can in fact buy/sell ETFs in dollars in many places since they allow fractional share transactions. I do this often at fidelity, so the only remaining point is the degree of purchase automation you require
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Dregob
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Re: Index Fund

Post by Dregob »

ruralavalon wrote: Mon Jul 19, 2021 7:15 pm
6d1v7x3 wrote: Mon Jul 19, 2021 6:50 pm Hi there I have excess cash sitting around which I would like to put in an S&P 500 index fund. I absolutely will not need this money for 20 years. I'm having trouble deciding between Fidelity and Vanguard. I have no relationship with either but I know I want to go with one of them. If the amount matters, it's about $100k. If anyone has any advice I would greatly appreciate it. Thank you so much.
Both are good choices, it's largely a matter of person preference. My personal preference is Vanguard.

Morningstar (1/20/2020) "The Best Fund Companies and Their Ratings", link. Vanguard is one of just five fund companies rated "high".

J.D.Power (4/27/2021), press release "2021 U.S. Self-Directed Investor Satisfaction Study" link. Vanguard is highest rated by investors for customer satisfaction.
From the link provided, only two companies are ranked below average, none are ranked average and ALL the rest are ranked best, or better than average? H0w does that work? Lake Woebegon, where are companies are above average?
Ferdinand2014
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by Ferdinand2014 »

I have been with Fidelity for over 23 years. 100% of my equity investments in taxable, SEP and IRA are in FXAIX (Fidelity 500 index fund - ER of 0.015). It has compounded over the years (with various share classes) into a tidy sum. I feel completely comfortable with all of my investments at Fidelity and in the S&P 500. I have been very happy. Either Vanguard or Fidelity are excellent choices. They both offer super low cost S&P 500 index funds with nearly identical returns.

https://fundresearch.fidelity.com/mutua ... /315911750
https://fundresearch.fidelity.com/mutua ... /315911750
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nalor511
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by nalor511 »

6d1v7x3 wrote: Sat Jul 24, 2021 5:28 pm Does anyone else think I should be looking at Schwab as well? What's the best bonus out there right now? By the way I've decided to go with a mutual fund for simplicity's sake.
Schwab is the only one of the three that will give you a bonus (including match) under 500k, so you have your answer. They will also waive VG MF fees if you ask <100k
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ruralavalon
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Re: Index Fund

Post by ruralavalon »

Dregob wrote: Sun Jul 25, 2021 3:55 pm
ruralavalon wrote: Mon Jul 19, 2021 7:15 pm
6d1v7x3 wrote: Mon Jul 19, 2021 6:50 pm Hi there I have excess cash sitting around which I would like to put in an S&P 500 index fund. I absolutely will not need this money for 20 years. I'm having trouble deciding between Fidelity and Vanguard. I have no relationship with either but I know I want to go with one of them. If the amount matters, it's about $100k. If anyone has any advice I would greatly appreciate it. Thank you so much.
Both are good choices, it's largely a matter of person preference. My personal preference is Vanguard.

Morningstar (1/20/2020) "The Best Fund Companies and Their Ratings", link. Vanguard is one of just five fund companies rated "high".

J.D.Power (4/27/2021), press release "2021 U.S. Self-Directed Investor Satisfaction Study" link. Vanguard is highest rated by investors for customer satisfaction.
From the link provided, only two companies are ranked below average, none are ranked average and ALL the rest are ranked best, or better than average? H0w does that work? Lake Woebegon, where are companies are above average?
The linked a article explains this. They haven't rated everyone yet and omit the list of "average" companies from the article.
Morningstar wrote:By now, we've published Parent Pillar ratings on more than 50 fund complexes, so I thought I'd share some of those ratings with you. Because Neutral equates with Average, I'll focus on the other rating bins. None has yet come in at Low, so that leaves just three levels to discuss this month: High, Above Average, and Below Average.
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McDougal
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by McDougal »

6d1v7x3 wrote: Sat Jul 24, 2021 5:28 pm Does anyone else think I should be looking at Schwab as well? What's the best bonus out there right now? By the way I've decided to go with a mutual fund for simplicity's sake.
I just retired, and decided to move my 401(k) from Fidelity (NetBenefits) to an IRA somewhere else, because of better fund choices elsewhere. For me, I chose Schwab, and they matched E-Trade's transfer bonus as icing on the cake. It's not automatic, you have to ask for it. YMMV. Good luck.
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6d1v7x3
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by 6d1v7x3 »

Does anyone think I should consider Fidelity's Zero fee fund as an alternative?
nalor511
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by nalor511 »

6d1v7x3 wrote: Mon Jul 26, 2021 3:18 pm Does anyone think I should consider Fidelity's Zero fee fund as an alternative?
Only if you will never want to move it in-kind to another brokerage.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by ruralavalon »

6d1v7x3 wrote: Mon Jul 26, 2021 3:18 pm Does anyone think I should consider Fidelity's Zero fee fund as an alternative?
Do not buy a Fidelity ZERO fund in a taxable brokerage account, they can never be moved if you ever decide you want your taxable account elsewhere.

The Fidelity ZERO funds are new, with a very short performance history, and use unique indexes created just for Fidelity. So far the 0.00% expense ratio has not produced a benefit to the investor, in either better returns or lower volatility. For example compare total stock market index funds: Portfolio Visualizer,1992-2021.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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6d1v7x3
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by 6d1v7x3 »

I'm all set to pull the trigger now and I'm having last minute jitters. What if under some unforeseen situation I have to pull some of the money out earlier? Does it make any difference which firm I use or whether it's a mutual fund or ETF in that situation?
SteveJones
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by SteveJones »

It comes down to this: everyday you keep asking questions is another day your money isn't in the market. Just do it! If you can't make a decision choose Vanguard and support the website's namesake!
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by sycamore »

6d1v7x3 wrote: Wed Jul 28, 2021 12:44 am I'm all set to pull the trigger now and I'm having last minute jitters. What if under some unforeseen situation I have to pull some of the money out earlier? Does it make any difference which firm I use or whether it's a mutual fund or ETF in that situation?
It doesn't really make a difference which firm you use. All brokers have a web site where you can enter an order to sell some or all of your shares.

Regarding mutual fund vs ETFs, as mentioned earlier you should read over https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds.

The main difference you'll experience is the price you get:
- with a mutual fund, you get the "closing Net Asset Value". This is determined at the end of each trading day. It's based on the closing prices of the stocks held by the mutual fund. You can place an order at any time of the day, but if you place it when the market is closed, you'll get the next business day's closing NAV.

- with an ETF, you'll get the market price, which fluctuates up and down during the day - the price reflects the changes in the stocks held by the ETF. You can place an order outside of trading hours but I wouldn't recommend it. Some investor don't like the placing order aspect of ETFs: you have to log on to your broker (or use an app) and place an order during day hours when you might be busy working or whatever.

Those differences aren't specific to "that situation" you're talking about. The differences are general. If you have to pull money out, you'll get a fair market price whether you use mutual fund or ETF.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by F150HD »

6d1v7x3 wrote: Sat Jul 24, 2021 5:28 pm Does anyone else think I should be looking at Schwab as well? What's the best bonus out there right now? By the way I've decided to go with a mutual fund for simplicity's sake.
IMO based upon what I am reading here you should go with Fidelity and keep it simple. They have a great website.

If you are opting for a fund look at FXAIX - Fidelity® 500 Index Fund
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ruralavalon
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by ruralavalon »

6d1v7x3 wrote: Wed Jul 28, 2021 12:44 am I'm all set to pull the trigger now and I'm having last minute jitters. What if under some unforeseen situation I have to pull some of the money out earlier? Does it make any difference which firm I use or whether it's a mutual fund or ETF in that situation?
No, it doesn't make a difference. Either can become spendable cash in your checking account in two days.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
bltn
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by bltn »

Long time client of Vanguard and Fidelity. Have had fine customer service from both.
Vanguard has no underlying sales incentives (commissions).
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6d1v7x3
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by 6d1v7x3 »

ruralavalon wrote: Wed Jul 28, 2021 9:03 am
6d1v7x3 wrote: Wed Jul 28, 2021 12:44 am I'm all set to pull the trigger now and I'm having last minute jitters. What if under some unforeseen situation I have to pull some of the money out earlier? Does it make any difference which firm I use or whether it's a mutual fund or ETF in that situation?
No, it doesn't make a difference. Either can become spendable cash in your checking account in two days.
I keep reading about Vanguard's terrible user controls. It could become spendable cash within two days there just as easily as Fidelity?
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ruralavalon
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by ruralavalon »

6d1v7x3 wrote: Wed Jul 28, 2021 1:49 pm
ruralavalon wrote: Wed Jul 28, 2021 9:03 am
6d1v7x3 wrote: Wed Jul 28, 2021 12:44 am I'm all set to pull the trigger now and I'm having last minute jitters. What if under some unforeseen situation I have to pull some of the money out earlier? Does it make any difference which firm I use or whether it's a mutual fund or ETF in that situation?
No, it doesn't make a difference. Either can become spendable cash in your checking account in two days.
I keep reading about Vanguard's terrible user controls. It could become spendable cash within two days there just as easily as Fidelity?
I don't know about Fidelity.

Our accounts are at Vanguard. Proceeds from fund sales are in our joint checking account within 2 business days.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by RetiredCSProf »

6d1v7x3 wrote: Wed Jul 28, 2021 12:44 am I'm all set to pull the trigger now and I'm having last minute jitters. What if under some unforeseen situation I have to pull some of the money out earlier? Does it make any difference which firm I use or whether it's a mutual fund or ETF in that situation?
If you are purchasing an ETF, then you need to "pull the trigger" while the market is open. If purchasing a mutual fund, you can place an order to complete at the next closing price. I hold FXAIX in a rollover IRA -- no cap gains distributed, but quarterly dividends, which I have automatically reinvested.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by lazynovice »

By my calculations you have left almost $1,800 on the table since you started this thread.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by jmch1990 »

lazynovice wrote: Wed Jul 28, 2021 6:16 pm By my calculations you have left almost $1,800 on the table since you started this thread.
I think it's actually about twice that. VFIAX on July 19 closed at 393.30 per share. It is 406.48 today. If I'm calculating right, $100k invested on July 19 would be worth ~$103,350 today.

Of course 9 days in the market is largely irrelevant and there are other considerations, but it underscores the larger point. Indecision has the worst expense ratio.

(Edit: Just noticed the timestamp, from July 20 is more appropriate and closer to $1,800. Mea culpa on the above calculation but general point stands.)
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by lazynovice »

jmch1990 wrote: Wed Jul 28, 2021 8:37 pm
lazynovice wrote: Wed Jul 28, 2021 6:16 pm By my calculations you have left almost $1,800 on the table since you started this thread.
I think it's actually about twice that. VFIAX on July 19 closed at 393.30 per share. It is 406.48 today. If I'm calculating right, $100k invested on July 19 would be worth ~$103,350 today.

Of course 9 days in the market is largely irrelevant and there are other considerations, but it underscores the larger point. Indecision has the worst expense ratio.

(Edit: Just noticed the timestamp, from July 20 is more appropriate and closer to $1,800. Mea culpa on the above calculation but general point stands.)
I went with the assumption in went into a mutual fund (OP later decided on a mutual fund) so used closing price on 7/20. If OP had bought an ETF at open on the 20th, it is more.

Time in the market beats Vanguard versus Fidelity or S&P versus Total market or ETF versus mutual fund.
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