Quote:
Originally Posted by kv968
You can buy funds without extra fees, however most, if not all of the funds, that you can purchase without a transaction fee have either very high expense ratios or loads. So for the money you would save, and more, by not paying a transaction fee gets eaten up with high expense ratios.
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I'm sorry friend but this is not true. When you say "most, if not all" you are incorrect. If you hold an account with E*TRADE, TD Ameritrade, Schwab, etc. you can select from
many no-load, no-fee funds including many that have low and very low expense ratios. You do make a valid point in that there are some, even many, of the no-fee funds that are either load or high expense, but that is certainly not true for "most, if not all."
Quote:
Originally Posted by kv968
If you'd want to buy funds from Vanguard, T Rowe, etc. you then have to pay a transaction fee.
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Now, this
is true. When I searched with the E*TRADE Mutual Fund Screener, I learned that only one Vanguard Fund is a no-load, no-fee fund. All of the other Vanguard Funds are available but would incur a transaction fee. The same is true of T. Rowe Price Funds.
If one wanted to invest specifically in a Vanguard Fund then, yes, it would prove better to hold the account with Vanguard to purchase their funds. Again, the same is true for T. Rowe Price. There are certainly some viable reasons one might choose Vanguard or T. Rowe Price funds.
I must concede, as well, that Vanguard Funds, in particular, have very, very low expenses. (Which is part of why they are so popular.)
However, the lists of NTF (no-transaction fee), no-load funds available through the major brokerages are quite extensive. So, selecting funds from those is certainly a viable option as well.
As I mentioned earlier, to many, the latter is also attractive due to the ability to buy from multiple fund families, purchase shares of ETFs, individual stocks, etc. all from the same account.
Don't get me wrong, I see your point. Perhaps a happy medium would be to hold a brokerage account and an account with a fund family or two as well. Depending, of course, on how much money one was investing, how one was investing that money, and how much time and effort one wished to spend managing, or at least keeping track of, his/her investments.
Safari makes some good points about the account held through Fidelity as well.