Want to open a brokerage account, but unsure of what the best options are. I’m 25, and don’t want to actively manage anything. My 401k is with Vanguard and my Employee stock plan is with Morgan Stanley. I have about $250k in cash savings right now. Questions: 1. Who should I open a brokerage account with? Vanguard, MS, Fidelity, Charles Schwab, other? 2. What type of brokerage account should I open? Self directed, managed (MS is offering a discounted 0.5% fee), or other? 3. If self directed, what split should I be looking at? I was thinking 75% index funds, and then diversify the rest (maybe convertible bonds?). Any guidance would be great! Thanks TC: $300K YOE: 2.5 #personalfinance #investments
I don’t think you could go wrong with any of the big brokerages. Feel like it’ll mostly come down to personal preference for that.
What could be some reasons for preference? I really don’t know anything, so not sure what my personal preference would be.
I’ve tried vanguard and fidelity and fidelity is way better. Cleaner UI, much less account management that has to be done on paper.
This sounds like your making this up for clout.
They all are basically the same, go off which one has the best UI
Fidelity. Best UI and services among the boomer brokerages. Not as slick and minimalist as Robinhood but good reputation and security. Robinhood just leaked all my info to the inter webs so I guess some teenage Russian kid is currently committing identity fraud with my creds.
Thanks! And what type of account would be best? Self directed vs managed? My understanding is that very few people can beat the market, so why would people even choose a managed brokerage account?
I usually do a self directed with 75pc SnP 500 and 25pc speculative stocks.
If you’re going passive, it doesn’t matter much which brokerage you go with for the most part. For simplicity’s sake, maybe just go with one of the ones you already have the employee plan with. Less passwords/accounts. Self directed works just fine if you plan on buying some index funds and such as you won’t have to pay a fee. As for split, that’s really up to when you need it. Are you planning on using this for a house down payment in 3-5 years? Or is this essentially going to sit for 20+ years until you pay for a kids college, retire, etc. If you’re looking at decades in the future, you can take more risk and go with mostly sp500 and maybe an international fund or two. It will keep you relatively well diversified, it’s simple, and you can ride the ups and downs to a very likely 6-9% long term return accounting for inflation if you reinvest the dividends.
Thanks for the great reply! So I would probably want to get a house in maybe 5 years. After that, would probably leave it for 10-20+ years. In that case, would I want less index funds to begin until after I’ve got a house? What other commodities are good to invest in (short term vs long term)?
I like TD Ameritrade and E*Trade because they have better portfolio performance tracking and will have advanced trading tools if you decide you want to do more advanced trading in the future. Fidelity only shows account performance monthly. Vanguard’s UI is bad. Probably lots of other big box names that are good. Haven’t looked at Schwab personally.
1. Whoever pays you the most and isn't robinhood. 2. Self directed 3. 100% index, dca and chill
For your index funds, make sure to select the aggressive versions of the major indices. You're 25 so you have lots of time to stay in the market. Take risks now while you are young and can afford to.
Thanks! Would you mind giving me some examples? E.g. what is an aggressive version of the sp500? What other ones are worth considering? I will also go do some research!
Most of the big names are quite competitive these days, so fees are about the same. Go to the platform and see which one you like the most. Nothing wrong with having multiple accounts in several brokerage accounts. Good luck.
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Done! Any advice would be much appreciated!