I opened my first investment account in medical school at E-Trade. I was roughly $160,000 in loan debt, but I opened a Roth IRA along with a brokerage account at the same time. I believe that stock trades at E-Trade were only $9.99 a trade, which was one of the lowest in the industry.
I knew nothing about indexing at the time. Never heard of Jack Bogle or Vanguard. That was probably still okay, since I did not have much disposable investment income at hand. Now that I am more attuned to the available options in the market. The following are a list of where I continue to place my investments and my impressions so far:
This was my first custodian after I started indexing my funds. Great low-cost options are available, along with Admiral funds for even more savings after you’ve reached a certain amount. There are essentially no service fees as long as you commit to electronic documents. The website interface is relatively basic but functional. I wished that Vanguard offered more detailed analyses on funds, but most of the time I already have done my homework about which funds to purchase prior to venturing on the Vanguard website.
My second pet peeve of Vanguard is that there is no easy way to calculate an annualized rate of return on my investments. The Vanguard interface has a “Balances Over Time” tab that calculates an overall growth of your funds like this:
Sometimes you don’t want to load up a spreadsheet to do these calculations by hand. I still keep my investments in Vanguard, but I have since started to diversify even more, as we will see below.
I started placing funds in Fidelity over the past year, due to a slightly lower expense ratio, and the fact that they offered airlines miles on keeping funds with them.
As I had written before, you can earn up to 50,000 Delta, American, or United airlines miles by stashing at least $100,000 in Fidelity. You can also receive miles for smaller investments. The Fidelity index fund options track all of the standard markets that Vanguard funds do, so you don’t really sacrifice much if you are a Vanguard loyalist.
I like the Fidelity interface. There are clear cut menu options, customer service is relatively competent and prompt. My employer uses Fidelity for its 401k custodian, so I’m able to reduce the number of logins to keep track of.
I opened a credit card account with Charles Schwab years ago when they offered a free iPod Shuffle after the first purchase. I promptly closed my account a year later when I realized that I was not getting any further benefits from using the card. I never even considered their investment wing until now, because their expense ratios were horrible. Not anymore:
This is only a recent change since March of 2017, presumably because of the competition in the market, especially from robo-advisors who also charge minimal management fees. I plan on placing all of my future investments in Schwab.