This thread is closed.

-HW "Skip" Weldon
Columbia, SC

"Mark Freeland" <nNeEwTs[at]sonic.net> wrote
- quote -

You solely and uniquely mentioned only Fidelity index funds in your false
claim about my posts.

- quote -

I made no such recommendation whatsoever to the OP in this thread.
Furthermore, I fairly consistently recommend index funds to newbies to
investing, not at random, as you seem to imply. Index mutual funds are not
for everyone, and indeed, they may not work for the OP. Indeed, I stopped
holding index funds in mid-2005. I may return to one for my international
allocation.

As for your ongoing comments on Fidelity and T. Rowe Price, etc. I recommend
the OP speak with any brokerage in which he's interested about what its IRA
accounts do and do not offer. Then follow up by asking for documentation of
the important points.

- quote -

You're inappropriately reading something into my statement that was never
there.

- quote -

Again, I reject the premise of your statement. I said ETFs are one option.

You failed to answer my query as to whether you had or have an account with
Fidelity, by the way.

Elle wrote:
- quote -

I didn't say that you praised Fidelity index funds solely or uniquely,
merely that you often praise them.
Some sample posts of yours:

http://groups.google.com/group/misc....d910b0a98499ec
"A safer bet is buying strictly index funds. ... In the last few years,
Fidelity's index fund offerings ... have become quite competitive with
Vanguard's ...."

http://groups.google.com/group/misc....7f2f791e13107c
"Last I heard (a few months ago), FSIIX had the lowest expense ratio of
any international fund."
(FWIW, that would make it unique, i.e. you praised this fund for its
unique attribute of being lowest cost in its class)

http://groups.google.com/group/misc....626dd48e9d7ba5
"Stick with low expense ratio, no load, index mutual funds. There is
evidence to suggest that they are the safest bet. Both Vanguard and
Fidelity offer their own funds that fit this criteria [sic]."

- quote -

Bingo! You fairly consistently recommend index funds (and in the
process, laud Fidelity's index funds), yet the Fidelity SimpleStart
program you suggested excludes all index funds, even Fidelity's. So
either you are suggesting to a relatively inexperienced investor to
invest in actively managed funds, or your suggestion of Fidelity's
SimpleStart program is irrelevant.

- quote -

The premise of my statement was that you suggested a periodic investment
program to circumvent fund minimums. If you had something diametrically
opposed in mind (accumulate assets for lump sum investment rather than
dollar cost average as you go along), you needed to communicate this.

Since you are now suggesting buying ETFs once a year, you should
complete the thought - where could the OP accumulate money for the first
year? What brokerage would be suitable for purchasing the ETF shares in
an IRA?

- quote -

It sounds like you doubt I could adequately treat /any/ option here at
the newsgroup. Either way, this is a remark that doesn't belong here.

- quote -

You suggest above that my saying that the OP was considering Vanguard is
irrelevant, and yet that very consideration goes far to answering your
own question here - the poster is interested in mutual funds (Vanguard,
with the $3K fund minimum that is difficult for the OP to meet).

- quote -

That's the point. The waivers are not written in the index fund
prospectuses. So the minimums are not waived. But you won't find a
statement to that effect. BTW, I have read the prospectuses, and did
prior to my previous post - I don't make blind speculations.

- quote -

I'd have even less hope, having actually read the prospectus.

- quote -

I didn't urge, I pointed out options, the same as you, though with
lower minimums.

- quote -

Point noted. Rectified below.

You suggested an automatic investment program - there is little poorer
treatment of fund trading than that - one commits to buying until one
meets the usual minimum of the fund. As you were so concerned about
restrictions on trading (index fund or not), it behooved you to point
out the poor treatment of trading when you suggested the Fidelity
program.

"If you Invest in a Fidelity Traditional IRA, Roth IRA, and Rollover
IRAs through a regular investment plan, the initial investment minimum
is $200 (requires monthly purchases of $200 until fund balance is
$2,500)."
http://personal.fidelity.com/product...utualfundsfaq3
(footnote 3)

With respect to Price index fund trading restrictions, the short term
redemption fee of 0.5% is imposed for three months, the same amount and
time period as for Fidelity:
http://www.troweprice.com/fundbook/m...=PREIX,00.html
http://personal.fidelity.com/product...html?315912204

By dint of your observation, are you suggesting that someone who is
working hard to accumulate enough to open an IRA account would (or
should) be concerned with short term trading within an IRA?

- quote -

Of course. That's why I gave links for every item I mentioned -
Scottrade, T. Rowe Price, Vanguard. To make it easy for the OP (and
critics) to verify the statements made, to check into additional details
and possible restrictions. I recommend the practice to all posters.

--
Mark Freeland
nNeEwTs[at]sonic.net

"Mark Freeland" <nNeEwTs[at]sonic.net> wrote
- quote -

Fidelity's index funds are not uniquely laudable, and the record of my past
comments shows this, contrary to your odd assertion. Also, I have directed
people to consideration of Vanguard. Vanguard does have more index funds to
offer compared to Fidelity. But, Mark Freeland, if you follow the direction
in which the OP pointed, Vanguard is irrelevant, because its minimums are
not do-able. So I don't know why you're dragging Vanguard into this, except
to say again that my having an account with Fidelity is wrong on so many
levels. (Even though you yourself have had accounts with them, and still
do?)

I also reject the premise of your statement. I actually had in mind that,
among other things, the OP could use S&P 500 mimicking ETFs. Buy them once a
year, say. But that's just one option. I doubt you could adequately treat
/all/ options here at the newsgroup, Mark Freeland.

It would still be helpful to know how much the OP can invest in this new
IRA, since that will help narrow down the options here. Also, what sort of
investment (stocks, mutual funds, ETFs, what?) he wants to make.

- quote -

If the OP wants index funds, just call Fidelity and see if the minimums are
waived. Ask them to point out where in the documentation this is written.

I wouldn't have much hope, though, since, for one, FSMKX's ordinary minimum
is $10k.

Your comments urging the OP to use T Rowe Price omit how it treats index
fund trading, which in fact might be quite poorly. If the OP is interested
in index funds, he should continue researching, and take nothing here at
face value. Otherwise, it's foolish to guess at his particular interests at
this point.

Many thanks to you guys for spending the time to comment. I will
definitely check out the links provided.

Patrick

Elle wrote:
- quote -

Relative to many other places, it is a good deal, because Fidelity does
not charge an IRA maintenance fee on small balance accounts. The
combination of the no-fee IRA (except closeout fee) and waived minimums
for in-house (Fidelity) funds with periodic investments is rare.

However, be advised that the Fidelity funds that Elle often lauds, and
that someone considering Vanguard would be inclined to care about -
index funds - are not eligible for Fidelity's minimum investment waiver.
(Very hard to find any acknowledgement on the Fidelity site - the best I
could find was a footnote saying that " Non-Fidelity funds and certain
Fidelity funds not eligible"; other than that, you have to look at each
fund prospectus to see if the fund waives the minimum or not.)

http://content.members.fidelity.com/...,,4629,00.html
(page with footnote 7, as quoted above.)

- quote -

T. Rowe Price also waives its minimums (except on its Summit funds), and
requires a more modest $50/month commitment. However, it also charges
$10/year for small IRA accounts (under $5K).

http://www.troweprice.com/common/ind...3D8359,00.html
(waiver via Automatic Asset Builder)

http://www.troweprice.com/common/ind...en&rfpgid=7592
($10 fee for small IRA accounts)


--
Mark Freeland
nNeEwTs[at]sonic.net

pmholzer wrote:
- quote -

If you want to open an IRA (more on that below), here are a couple of
other alternatives:

- Vanguard STAR has kept a $1000 minimum specifically for people like
you, who want to open an IRA, but start out smaller.
http://flagship4.vanguard.com/VGApp/...FundIntExt=INT

- Open an index fund account somewhere else, at least until you have
enough to move it to Vanguard - for example, Scottrade offers no-fee
IRAs (with no closing fees), and sells Dreyfus S&P 500 Index fund
(PEOPX) with no transaction fee. Its 0.50% expense ratio is not quite
as low as Vanguard's 0.18%, but you won't be charged $10/year for
keeping a balance under $10K (which is what Vanguard charges on its
index funds), or another $10 for having an IRA fund under $5K (another
Vanguard fee).

https://trading.scottrade.com/trade/...ndNTFList.aspx
(list of Scottrade NTF funds; go to page 6 for PEOPX)

http://sites.stockpoint.com/scottrad...p?Symbol=PEOPX
(Shows minimum $1K investment required at Scottrade for PEOPX)

http://www.scottrade.com/reasonstoap...toapply.asp#16
(Shows $0 fees for Scottrade IRAs, to maintain or to close.)

http://flagship4.vanguard.com/VGApp/...FundIntExt=INT
(Vanguard fees for its 500 index fund)

http://flagship4.vanguard.com/VGApp/...FundIntExt=INT
(Expense ratio of 0.18% for Vanguard 500 index fund.)

- quote -

I'm not sure what you mean here - to open a Vanguard IRA (other than a
STAR fund account), you need $3K. That isn't a fully funded IRA,
because you are allowed to contribute up to $4K per year to an IRA.

If you mean that you'll continue funding the IRA until you reach the
limit, and then resume contributing to the 401K, that's fine.

- quote -

Take a look at what your employer is offering in the 401K. If you are
happy with the choices, and they are low cost, I don't think it is worth
the hassle of dealing with a small IRA.

You do have more flexibility with the IRA - that's why you need to see
if you like your 401K choices enough to forgo that flexibility in
exchange for reduced paperwork and moving money around (from MMF to IRA,
or from IRA to IRA as you accumulate more money).


--
Mark Freeland
nNeEwTs[at]sonic.net

"pmholzer" <pmholzer[at]mindspring.com> wrote
- quote -

Patrick, responding to this is difficult without some hard numbers. If you
can just say how much you currently put into your 401(k) each year, that
would clear up a lot. Also, if you can speak to any debts you have (home
mortgage, car payments, etc.), this might bear on the situation.

I have used Fidelity for years and see that they have a good deal if one can
commit $200 a month to their IRA. But it almost sounds like that's too much.

I can't compare with Vanguard but rather just possibly wanted to mention
some other options.

Hello all,

My situation is that my 401K program that I am enrolled in is a profit
sharing plan. My employer contributes an amount based on company
profits for the year. The portion I receive would be the same whether
I contributed 1% of my salary or 14% (14% of the employees salary is
the max allowed). Currently, I contribute the max. Also, I have no
Roth IRA account.

I'd love to setup a Roth IRA account and I am really interested in
Vanguard. However, the minimum amount to setup a fund is $3K. Within
our family budget it would take a long time to build up that required
3K. My question: Do I modify my 401K contribution so that I still get
the employer's contribution and take the extra money that would have
gone into the 401K program and place it into a MMA until I have the
needed funds to open a Roth IRA? At that point, I would fully fund my
IRA and add any leftover money back into my 401K program.

This would fall into the rule of:

1) get 100% of the employers 401K match
2) fully fund Roth IRA account
3) place any additional monies int the 401K up to the max

thoughts??

Many Thanks,
Patrick