6 ms·

If you're going to engage in an arms war, you better have the best tools. I never really understood how small investors think they can do microtrading, but appa

by mattip 13y ago

If you're going to engage in an arms war, you better have the best tools. I never really understood how small investors think they can do microtrading, but apparently it is common since the trading sites bombard you with the very latest statistics.

kevando 13y ago
http://www.jamesaltucher.com/2011/04/10-reasons-you-should-never-own-stocks-again/ http://www.jamesaltucher.com/2011/04/10-reasons-you-should-n... I know, right. James Altucher has a great post on this, especially like his #3
- raverbashing 13y ago
  #5 is more to the point All credit rating companies give it a good score All auditing companies agree it's going great All numbers look good All "market analysts" recommend it And then it implodes. Remember what happens when you don't know who the fool on the tables is.
gizmo 13y ago
Since all trading sites get a commission on each trade it's no surprise that they don't push people to put their money in a number of Vanguard index funds for 30 years. On some of the investment funds offered by my bank their fees are so high the investment fund will never ever make money for the customer. And yet they shamelessly sell it anyway.
- ImprovedSilence 13y ago
  I use TDAmeritrade, which actually offers a number of vanguard and iShares ETF's commission free. It really incentivizes investing in those rather than anything else. I know there has to be a catch somewhere on it, but I don't see what it is...
  - gizmo 13y ago
    9 out of 10 times this means TDAmeritrade receives a kickback from Vanguard/iShares whenever you buy their shares. So there is a commission, and it's still being paid by you (albeit indirectly). This kickback doesn't need to be very large because TDAmeritrade isn't doing much work. My guess is that you can't buy shares in Vanguard's low profit margin funds (such as VFIAX - 0.05% expense ratio) without any fees, only Vanguard's high margin funds. Of course, Vanguard wants to steer people to their more profitable investment funds, and paying the sales fee to the bank on behalf of the customer is a good way to do that.
    - ImprovedSilence 13y ago
      Perhaps. I'm quite green when it comes to investing, so I probably haven't paid as much attention to expense ratio as I should have, but I have tried to minimize investments in high expense ratio accounts. The big one for me that I get commish free is IVV, which, if I buy in small chunks monthly isn't too bad at a .07% ratio, no?
      - gizmo 13y ago
        IVV is very solid. IVV is competing fiercely with the new competitor VOO and SPY (the 3 funds are effectively identical). Vanguard charges the least (0.05% per year) and SPDR charges the most (0.09%). 3 years ago IVV had an expense ratio of 0.09%, now they're charging 0.07% and I expect their ratio to go down to 0.06% in the next year or two. Vanguard is trying to steal their lunch. So if you get IVV without commission you're benefiting from this price war.

by mattip 13y ago

kevando 13y ago

http://www.jamesaltucher.com/2011/04/10-reasons-you-should-never-own-stocks-again/ http://www.jamesaltucher.com/2011/04/10-reasons-you-should-n... I know, right. James Altucher has a great post on this, especially like his #3

raverbashing 13y ago
#5 is more to the point All credit rating companies give it a good score All auditing companies agree it's going great All numbers look good All "market analysts" recommend it And then it implodes. Remember what happens when you don't know who the fool on the tables is.

gizmo 13y ago

Since all trading sites get a commission on each trade it's no surprise that they don't push people to put their money in a number of Vanguard index funds for 30 years. On some of the investment funds offered by my bank their fees are so high the investment fund will never ever make money for the customer. And yet they shamelessly sell it anyway.

ImprovedSilence 13y ago
I use TDAmeritrade, which actually offers a number of vanguard and iShares ETF's commission free. It really incentivizes investing in those rather than anything else. I know there has to be a catch somewhere on it, but I don't see what it is...
- gizmo 13y ago
  9 out of 10 times this means TDAmeritrade receives a kickback from Vanguard/iShares whenever you buy their shares. So there is a commission, and it's still being paid by you (albeit indirectly). This kickback doesn't need to be very large because TDAmeritrade isn't doing much work. My guess is that you can't buy shares in Vanguard's low profit margin funds (such as VFIAX - 0.05% expense ratio) without any fees, only Vanguard's high margin funds. Of course, Vanguard wants to steer people to their more profitable investment funds, and paying the sales fee to the bank on behalf of the customer is a good way to do that.
  - ImprovedSilence 13y ago
    Perhaps. I'm quite green when it comes to investing, so I probably haven't paid as much attention to expense ratio as I should have, but I have tried to minimize investments in high expense ratio accounts. The big one for me that I get commish free is IVV, which, if I buy in small chunks monthly isn't too bad at a .07% ratio, no?
    - gizmo 13y ago
      IVV is very solid. IVV is competing fiercely with the new competitor VOO and SPY (the 3 funds are effectively identical). Vanguard charges the least (0.05% per year) and SPDR charges the most (0.09%). 3 years ago IVV had an expense ratio of 0.09%, now they're charging 0.07% and I expect their ratio to go down to 0.06% in the next year or two. Vanguard is trying to steal their lunch. So if you get IVV without commission you're benefiting from this price war.