Vanguard or Fidelity?

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jgs9455
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Vanguard or Fidelity?

Postby jgs9455 » Thu May 10, 2007 11:45 am

Based on others actual experiences, should I go with Vanguard or Fidelity?

I plan on opening a Roth IRA and contributing the max for this year and ongoing (I should have opened up one last year but oh well). I'll probably invest this in a target retirement fund.

I also plan on opening a taxable accont and investing in low cost index funds. I'll also set up a automatic contribution each month.

So far I have only researched Vanguard. If I go with them I'll go with e-statements to avoid the fees. I do not have $50k for the admiral funds (yet).

If I go with Fidelity I do have enough to buy into a couple low cost Spartan Funds.

So which is the better place to invest? Opinions?

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jdroth
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Postby jdroth » Thu May 10, 2007 5:22 pm

I'm curious to hear repsonses on this, too. Our business uses Vanguard for its retirement accounts. I don't know much about Fidelity. When (not if) I leave ShareBuilder, I'll have to decide where to move. That's a while away yet, though, since I don't have enough to interest a big broker...

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Postby nickel » Thu May 10, 2007 5:23 pm

I'm a huge Vanguard fan. That being said, Fidelity has become *really* competitive on cost for their Spartan funds. As long as there's not an insurmountable difference in the minimum investments, I would say to pick based on cost -- check the funds you like at both places, also check on account fees (you already know about e-statements to avoid fees at Vanguard, not sure about these costs at Fidelity).

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Both

Postby horseloverfat » Fri May 11, 2007 6:40 am

I have my company 401k through Fidelity but chose Vanguard for my Roth IRA for a couple of reasons:

Vanguards Target Retirement Funds outperformed Fidelity's comparable funds.
Vanguards low expense ratio.

I knew that Vanguard charged if you don't have more than 5K in an account, but I figured this would only be applicable for 1 year. In the end I went with Fidelity. Either are a good choice, since deciding to start an IRA is the hardest decision.

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Re: Both

Postby nickel » Fri May 11, 2007 8:07 am

horseloverfat wrote:I have my company 401k through Fidelity but chose Vanguard for my Roth IRA for a couple of reasons:

Vanguards Target Retirement Funds outperformed Fidelity's comparable funds.
Vanguards low expense ratio.

I knew that Vanguard charged if you don't have more than 5K in an account, but I figured this would only be applicable for 1 year. In the end I went with Fidelity. Either are a good choice, since deciding to start an IRA is the hardest decision.


Keep in mind, however, that Fidelity's Spartan funds actually beat many (most?) of Vanguard's index funds on expense ratio. As a diehard Vanguard fan, I was really surprised to see that when I changed jobs and was forced into Fidelity for my work retirement account.

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Postby MossySF » Fri May 11, 2007 9:45 am

If I had to do it again, I'd use both Fidelity and Vanguard. Fidelity for core funds Total Stock, Extended, Total Intl) -- Vanguard for Large Cap Value, Small Cap Value, REIT -- and finally Wells Fargo/Zecco to pick up ETFs to fill out the remainder of my AA plan. I've got too much unrealized cap gains now and any switch over would be more expensive than the fee savings. Only option is to tough it out a while longer to get admiral shares at Vanguard.

If you have enough cash for the 25K Wells Fargo requirement, Vanguard domestic ETFs are as low as 0.07% which Fidelity offers at the 100K per fund level. Zecco charges $40/annual for IRAs and Roth IRAs which offsets the $0 commission offer.

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Postby benbr » Sat May 12, 2007 1:46 pm

I'm no kind of expert, but I've have employer retirement accounts with Fidelity and Merrill Lynch. I've found the web access at Fidelity to be really useful. They also have a retail outlet near my office, and they are super helpful. I set up a college fund through them and found it to be a pleasantly easy experience.

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Postby jgs9455 » Tue May 29, 2007 2:14 pm

Update: I went with Vanguard.

I know Fidelity has lower fees in the Spartan funds at the $10k level, but not real sure how long that will last.
I really like Vanguard's mutually owned low cost approach.
Hopefully I'll be at the $50k level one day to go with Vanguard's Admiral funds :)

Right now I only opened and fully funded my RothIRA for 2007 (in the 2045 fund).
I might switch that once I set up the taxable account and set up a diverse portfolio of different index funds.

Trying to figure out how much cash to keep at 6% at FNBO and how much to invest.
Originally I wanted to invest more, but I'm also looking at a house and might need it liquid.

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Postby CTBoss » Tue May 29, 2007 8:18 pm

I researched this topic extensively. What I found is that they're both great. I found almost no bad comments about either, it comes down to personal preference and investment goals.

I chose Vanguard because I like their long-standing policy of low-cost investing and because I had a small amount of money to invest and the fees were less at Vanguard at lower dollar amounts versus Fidelity. I can Rollover my IRA at a later time if I feel the need. At the time, I am very happy with Vanguard.

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I know you've already chosen but...

Postby pf101 » Wed May 30, 2007 11:56 am

I'll throw in my $.02.

I like Vanguard for the following reasons*:

1 - They are a non-profit which means that the money you pay in fees/expenses goes back to develop more programs for customers instead of in the founder's pockets. There's a reason that the founders of Fidelity are on the "richest" lists and it isn't just because of *their* investments.

2 - Vanguard originated low cost, it's their whole philosophy. They aren't just doing it to compete like Fidelity is.

3 - With their new fee structure, it's very easy to get an account that won't cost you anything.

4 - They are *very* focused on customer service to the point where if call volumes are high an e-mail goes out to the entire company asking people to go man the phones. Also, management is required to serve a certain number of hours each month on the phones to keep up with what the customers are wanting.

5 - They have award winning education materials.

6 - They treat their employees well, which is a good sign for how a company acts in general in my experience.

So, those are just some thoughts from a former insider.


* Note that I used to work for Vanguard so I may be a bit biased, but I was also an investor there long before I worked there.

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I use Fidelity

Postby SJean » Wed May 30, 2007 12:21 pm

Yeah, this topic is sort of over.

I think I would agree with the "they are both great" philosphy--no one has said a bad word about either of them. I chose Fideltiy for my Roth IRA strictly because my workplace uses Fidelity for the 401k and I wanted to keep it simple. There isn't any fees on my account--if you set up auto-investing, they waive the minimum ammount neede to participate in their funds.

Fidelity has some great educational materials as well, and every time I've called, they've been friendly and helpful.[/i]

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Postby jgs9455 » Fri Jun 01, 2007 12:03 pm

Wow, if pf101 will invest at Vanguard after working there - that says a lot in my book. I used to work for Chase and I'd never bank there.

SJean, the topic doesn't have to be over for people to share their opinions. Both are probably good places and that's why they were on my short list. I'm sure different people have different reasons why they go with each one, but its always good to hear other peoples input. And there are even people that have gone with both.

I personally like Vanguard because I found them in college 10 years ago in a finance class while working on a project. Most people created portfolios out of the funds with the highest historical return or crazy stock picks. I picked Vanguard's funds because they had good returns and the lowest expenses. Guess who's portfolio landed on top in the end?

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Postby pf101 » Fri Jun 01, 2007 3:05 pm

jgs9455 wrote:Wow, if pf101 will invest at Vanguard after working there - that says a lot in my book. I used to work for Chase and I'd never bank there.


It's funny you say that. I actually use that example a lot. I know lots of people who have worked for businesses they would never use or recommend after having seen the inside.

Having worked at Vanguard only made me *more* of a supporter because I saw first hand the things they do for their customers. They're a good company. Fidelity is my #2 and T. Rowe is my #3 for fund companies.


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