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Is there something specific about Vanguard that you use it for, I can buy ETFs on e-trade and other platforms right?

atombender 6y ago
Yes, you can. Vanguard is a brokerage, just like E-Trade, Schwab, Fidelity, etc. They provide all sorts products, such as IRAs. A good reason to use Vanguard as a company is their mutual funds. (Though you can trade Vanguard mutual funds elsewhere, they'll usually come with transaction fees.) Mutual funds are arguably superior to ETFs for many investors, in a few ways. * Mutual funds are fractional by nature — you can trade as little as $1. Right now, only a very small handful of brokers support fractional shares of ETFs. * Since MFs aren't traded as whole units, you can set up automatic investing. Let a certain % of your paycheck go into the MF every month. Not possible with ETFs on most platforms, a notable exception being M1. * Since MFs only settle their NAV once a day, you're discouraged from compulsively checking your portfolio every few hours. If the market is temporarily down, you won't see it reflected in real time. Some people consider the real-time aspect of ETFs superior, but for long-term investing, this lack of an instant dopamine rush means it's easier to just not think about it. Fewer emotional decisions. * Mutual funds can be "funds of funds". Regulations prevent ETFs from doing the same thing. A good example of a FoF is Vanguard's target date retirement funds, which are nearly exactly equivalent to a Boglehead-style three-fund portfolio. MFs have a reputation for being expensive, but Vanguard's have some of the lowest fees on the market. MFs also can be tax-inefficient, but Vanguard has patented a loophole that makes them as efficient as ETFs when held in a taxable account. Vanguard is also a great company; easily my favourite investment company. Its ownership structure is inverted: The company is collectively owned by its funds, which means that you, as a MF shareholder, will own a part of Vanguard. Note: The above points about MFs are largely moot with robo advisors like Betterment.
- Drdrdrq 6y ago
  > MFs also can be tax-inefficient, but Vanguard has patented a loophole that makes them as efficient as ETFs when held in a taxable account. Incredible... You weren't kidding: https://www.bloomberg.com/graphics/2019-vanguard-mutual-fund-tax-dodge/ https://www.bloomberg.com/graphics/2019-vanguard-mutual-fund...

Yes, you can. Vanguard is a brokerage, just like E-Trade, Schwab, Fidelity, etc. They provide all sorts products, such as IRAs. A good reason to use Vanguard as a company is their mutual funds. (Though you can trade Vanguard mutual funds elsewhere, they'll usually come with transaction fees.) Mutual funds are arguably superior to ETFs for many investors, in a few ways. * Mutual funds are fractional by nature — you can trade as little as $1. Right now, only a very small handful of brokers support fractional shares of ETFs. * Since MFs aren't traded as whole units, you can set up automatic investing. Let a certain % of your paycheck go into the MF every month. Not possible with ETFs on most platforms, a notable exception being M1. * Since MFs only settle their NAV once a day, you're discouraged from compulsively checking your portfolio every few hours. If the market is temporarily down, you won't see it reflected in real time. Some people consider the real-time aspect of ETFs superior, but for long-term investing, this lack of an instant dopamine rush means it's easier to just not think about it. Fewer emotional decisions. * Mutual funds can be "funds of funds". Regulations prevent ETFs from doing the same thing. A good example of a FoF is Vanguard's target date retirement funds, which are nearly exactly equivalent to a Boglehead-style three-fund portfolio. MFs have a reputation for being expensive, but Vanguard's have some of the lowest fees on the market. MFs also can be tax-inefficient, but Vanguard has patented a loophole that makes them as efficient as ETFs when held in a taxable account. Vanguard is also a great company; easily my favourite investment company. Its ownership structure is inverted: The company is collectively owned by its funds, which means that you, as a MF shareholder, will own a part of Vanguard. Note: The above points about MFs are largely moot with robo advisors like Betterment.

Drdrdrq 6y ago
> MFs also can be tax-inefficient, but Vanguard has patented a loophole that makes them as efficient as ETFs when held in a taxable account. Incredible... You weren't kidding: https://www.bloomberg.com/graphics/2019-vanguard-mutual-fund-tax-dodge/ https://www.bloomberg.com/graphics/2019-vanguard-mutual-fund...