Fidelity, Vanguard, American, other?

[jc3900]

Now I know this might be like comparing apples and oranges, but which company do you like. What are the pros and cons of each? I know American funds take a load off at the beginning but has a very good track record for performance. Vanguard is like the father of indexing and low cost and fidelity has a lot of options and is also low cost. Which Company do you like and Why?

[jIM_Ohio]

I like:

T Rowe Price-
They have 2-3 funds in each asset class and keep fund managers longer.

I am beginning to watch a fund family called Bridgeway. They specialize in small and microcaps. They close funds quickly to keep asset sizes small. There fees are among lowest I have seen (less than .7%).

I am also tracking a few funds by Permanent Porfolio family, They have funds on the moderate risk side of things. Natural resources, bonds and commodities in particular.

Dislike:
Fidelity- they have too many funds. If I want a large value fund, there might be 5-8 I need to sort with, and 8 of the top 10 holdings in those funds will be the same.
Then you track a fund, and they switch fund managers as often as I change underwear.

any fund with a front end load.

[disneysteve]

any fund with a front end load.

Agreed. There is no reason to ever buy a fund with a load. There are far too many no load options.

I like whatever company has a top-performing fund in the category I am looking to invest in. I own funds from Vanguard, Janus, Heartland, Cohen and Steers and Oppenheimer right now. And I have a Wells Fargo money market fund.

[Caoineag]

I like T. Rowe Price. They made it easy to get started, have a good track record and they allow me to go completely paperless.

I am not experienced enough to comment on the various other companies available.

[maat55]

I have 2 funds with american I have shut off. I will be moving to no load funds from now on.

[Aleta]

I have Vanguard and like the fact that they make it easy for inexperiences investors and try to answer your questions. Also like their lower fees and index funds.

[Jazzmint98]

I also prefer T Rowe Price. They have excellent customer service. In addition, for the most part you can invest as little as $50 per month in mutual funds by automatic debit from a checking or savings account, as opposed to having an initial investment requirement.

[jc3900]

How do you guys decide on funds? I have only invested a small sum in an S&P 500 index from vanguard so far. When I start planning for the future where I will have to choose more funds to diversify, my head starts spinning. Just a few of the questions that started poppin in my mind.


Do I want to invest in small, mid, large cap? How much of a blend should I keep. Which international funds are best? How much should i have exposed to emerging markets and established foreign markets? Should I invest in certain sectors? Precious Metals? If so, how much? Once I have found the type of fund I want, how do I choose between all of them?

How do you guys rap yourself around all this? There are so many options to managing one's portfolio. Where do you start? I have so many questions going around in my mind that it is all a jumbled mess.

[jIM_Ohio]

How do you guys decide on funds? I have only invested a small sum in an S&P 500 index from vanguard so far. When I start planning for the future where I will have to choose more funds to diversify, my head starts spinning. Just a few of the questions that started poppin in my mind.


Do I want to invest in small, mid, large cap? How much of a blend should I keep. Which international funds are best? How much should i have exposed to emerging markets and established foreign markets? Should I invest in certain sectors? Precious Metals? If so, how much? Once I have found the type of fund I want, how do I choose between all of them?

How do you guys rap yourself around all this? There are so many options to managing one's portfolio. Where do you start? I have so many questions going around in my mind that it is all a jumbled mess.

There are two ways to do what you ask.

The most common way is called asset allocation. Asset allocation is like underwear- everyone's is different, most does the same function, and some of it is more stylish than others. The biggest difference is you should not change your asset allocation as much as you change your underwear.

The other way to do what you asked is "core and explore". Find one core fund, put money in that while you learn, then branch out as you get more confidence. Once you branch out asset allocation will come into play anyways.

I suggest you start with core and explore, then move into asset allocation. That is how I got to where I am at today.

A core fund (to me) is a fund I can add money to in any market condition. it is something I have confidence in a super long term investment. My core fund has been PRFDX for years now. I keep pouring money into it because I believe large cap stocks and dividend stocks are the cornerstone to a good investment plan.

You S&P 500 fund could be a core fund- if you have confidence that indexing and the volatility of the fund is in line with what you want to do investing wise.

Then branch out into other investments (like small caps and foreign stocks).

My asset allocation is
43% large cap stocks
15% mid cap stocks
15% small cap stocks
15% large cap foreign stocks
10% small cap foreign stocks
2% bonds

In addition I add 1% to bond position every 6 months in an effort to get to 90-10, and maybe 80-20 over the next 15 years. I prefer slow moves and deliberate moves than rapid changes in asset allocation.

[Broken Arrow]

Asset allocation is like underwear- everyone's is different, most does the same function, and some of it is more stylish than others. The biggest difference is you should not change your asset allocation as much as you change your underwear.

HILARITY!

[jc3900]

I guess I am jumping the gun a little bit as it won't be two more years untill I do some serious saving. Does anyone have any good books to read that emphasize dollar cost averaging, indexing, and asset allocation?

[Broken Arrow]

I guess I am jumping the gun a little bit as it won't be two more years untill I do some serious saving. Does anyone have any good books to read that emphasize dollar cost averaging, indexing, and asset allocation?

Did I mention the Boglehead's Guide to Investing? Seriously, buy it, read it, love it.

[zetta]

I just reserved Boglehead's Guide at the library. Just curious -- does it cover how to actually pick a mutual fund from the thousands out there?

[Aleta]

BA: If you keep mentioning that book, I'm going to have to reserve it from my library as well. I checked it out and it looks good. What did you specifically get out of it?

[Broken Arrow]

BA: If you keep mentioning that book, I'm going to have to reserve it from my library as well. I checked it out and it looks good. What did you specifically get out of it?

It's actually not much different than the general investment advice that has been given here, but in the book, you really get into the depth of it, and in much greater detail.

For people who are (or perhaps should be) passive investors, and who may already like the idea of index funds through Vanguard, this really is that do-it-all how-to book that I think is worth adding to your library. I bought my copy, and do not regret it one bit.

Even for someone who isn't a full-blown Boglehead (someone who believes in John Bogle's philosophy in low-cost index funds), I still think it's a great place to start and build from.

I know that index funds tend to be overplayed here and elsewhere, but the more I read about it (including outside sources both for and against Vanguard index funds), the more efficient and effective I realize that it is. I mean, it's one thing to say, "Oh yes, I've read about it and know that index fund is a nice way to go." but it's another to realize just how much so and why.

I'm not the kind of guy that likes to do something just because everybody else tells me to. No. I highly value critical thinking, and yet, this book still won me over, standing on its own merits.

That said, the book is rather biased towards Vanguard index funds, and it's worth keeping that in mind when you read the book. It's also worth keeping in mind that I am not a full-fledged Boglehead, as I technically believe in research over arbitrary diversification. So, I can't say I absolutely agree with everything that's been written in the book (though let me add that the quibbles are few and far in between).

However, when it's all said and done, there's a lot that's right with this book, and the individual investor would have to try very hard to beat that level of (long-term, net) performance.