Self Directed Brokerage or Keep It Simple

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jbow44
Posts: 44
Joined: Sat Jan 03, 2015 9:38 am

Self Directed Brokerage or Keep It Simple

Post by jbow44 » Mon Oct 30, 2017 8:46 pm

Hello.

We have decided to start maximizing my wife's 457/roth contributions this year. We've got about 15k so far on our way to maxing it out at 18 and plan to do so moving forward.

This plan has offerings within the plan as well as the option of selecting our own funds through TD Ameritrade. Of course there are no fees except the basic ER's for the investment options in the plan, but TDA has commissions ($6.95 per transaction) on the ETF's I currently invest in. What I've done thus far is every 2-3 months move money from the 457 into the TDA account and purchase the ETF's according to my AA. To this point, most of the funds have been on their "commission free" list. However, TDA sent me a message that most of the funds I purchased are no longer going to be on that list as of November. Thus, each time I move money into that account I'll incur that charge.

So, should I continue to utilize the vast array of options through TDA and simply pay the commission fees? How often would you recommend moving the money over?

Or should I simply forget about TDA and stick to what's available to me, select an appropriate AA and call it a day?


Funds I have available with 457/roth:

iShares total stock: BKTSX ER: 0.04
iShares total international: BDOKX ER: 0.11
iShares aggregate bond: WFBIX ER: 0.05
American EuroPacific: RERGX ER: 0.50
Prudential Total Bond: PTRQX ER: 0.43



Funds I currently invest with TDA:

Vanguard total stock: VTI ER: 0.04
Vanguard total international: VXUS ER: 0.11
Vanguard international small cap: VSS ER: 0.13
Vanguard small cap: VBR ER: 0.07
Vanguard health: VHT ER: 0.10
Vanguard total bond: BND ER: 0.05

Any thoughts would be appreciated.

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Sandtrap
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Re: Self Directed Brokerage or Keep It Simple

Post by Sandtrap » Mon Oct 30, 2017 9:58 pm

Personally, I would drop TDA with that policy change. But that's me. I don't like to be "nickled and dimed".
What funds are available to you?
Would it cost you in ER to be limited that way?
Would you lose access to the Vanguard family of funds?
How much would it cost you in total transaction fees for the year vs savings in lower ER's and better funds?

jbow44
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Re: Self Directed Brokerage or Keep It Simple

Post by jbow44 » Mon Oct 30, 2017 10:04 pm

The funds I have available in that plan are listed in the original post with ER's.

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Sandtrap
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Re: Self Directed Brokerage or Keep It Simple

Post by Sandtrap » Mon Oct 30, 2017 10:18 pm

jbow44 wrote:
Mon Oct 30, 2017 10:04 pm
The funds I have available in that plan are listed in the original post with ER's.
Oops. Thought you might have had more that weren't listed.
That's a short list. I can see why you went through TD to access Vanguard.

pkcrafter
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Re: Self Directed Brokerage or Keep It Simple

Post by pkcrafter » Mon Oct 30, 2017 10:46 pm

These are all your choices, or just the ones you are using?
Funds I have available with 457/roth:

iShares total stock: BKTSX ER: 0.04
iShares total international: BDOKX ER: 0.11
iShares aggregate bond: WFBIX ER: 0.05

These three are all you need--the 3-fund portfolio


viewtopic.php?f=10&t=88005

So, should I continue to utilize the vast array of options through TDA and simply pay the commission fees?

No

Or should I simply forget about TDA and stick to what's available to me, select an appropriate AA and call it a day?

Yep.


American EuroPacific: RERGX ER: 0.50
Prudential Total Bond: PTRQX ER: 0.43
Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

jbow44
Posts: 44
Joined: Sat Jan 03, 2015 9:38 am

Re: Self Directed Brokerage or Keep It Simple

Post by jbow44 » Mon Oct 30, 2017 10:56 pm

pkcrafter wrote:
Mon Oct 30, 2017 10:46 pm
These are all your choices, or just the ones you are using?
Funds I have available with 457/roth:

iShares total stock: BKTSX ER: 0.04
iShares total international: BDOKX ER: 0.11
iShares aggregate bond: WFBIX ER: 0.05

These three are all you need--the 3-fund portfolio


viewtopic.php?f=10&t=88005

So, should I continue to utilize the vast array of options through TDA and simply pay the commission fees?

No

Or should I simply forget about TDA and stick to what's available to me, select an appropriate AA and call it a day?

Yep.


American EuroPacific: RERGX ER: 0.50
Prudential Total Bond: PTRQX ER: 0.43
Paul
There are some target date funds that invest in various ratios of the russell 1000, the international fund, a REIT and a bond. I'm not looking much at those.

The only other one worth mentioning is MFS core equity MRGKX.

I'd just stick to the 3-fund index portfolio listed if I go that rout.

gostars
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Joined: Mon Oct 09, 2017 7:53 pm

Re: Self Directed Brokerage or Keep It Simple

Post by gostars » Mon Oct 30, 2017 11:05 pm

jbow44 wrote:
Mon Oct 30, 2017 8:46 pm
iShares total stock: BKTSX ER: 0.04
iShares total international: BDOKX ER: 0.11
iShares aggregate bond: WFBIX ER: 0.05
This is the prototypical three-fund portfolio, all with great ERs. The only reason I would even consider anything other than this would be the small cap value tilt offered by VBR, which has no good equivalent. If your investment philosophy points you to that, consider overweighting it before the TDA cutoff, shifting the rest back to your main plan, and using future contributions to balance out. If you don't have a particular need for the tilt, then move it all back, set your AA, and get on with your life.

goingup
Posts: 2773
Joined: Tue Jan 26, 2010 1:02 pm

Re: Self Directed Brokerage or Keep It Simple

Post by goingup » Tue Oct 31, 2017 7:55 am

The best part about participating in 401K/403B/457s is the automated deductions from a paycheck to automatically purchase mutual fund shares in your plan. Automation!

The idea of self-directing contributions with attendant fees would be less than optimal to me. Truly, a workplace plan is one place you should set it and forget it. The I-share index funds options you have are terrific. Set up contributions with those funds and check back every several years. :D

jbow44
Posts: 44
Joined: Sat Jan 03, 2015 9:38 am

Re: Self Directed Brokerage or Keep It Simple

Post by jbow44 » Tue Oct 31, 2017 8:00 am

Thanks goingup and gostars. I don't mind being hands on and making the moves periodically but I find myself checking on things probably more than I should or need to. Plus if it's going to cost me money to make those moves it becomes more obvious that simplicity is the master key to success. :beer

With that I'll likely be taking your wise advice.

Be well!

goingup
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Joined: Tue Jan 26, 2010 1:02 pm

Re: Self Directed Brokerage or Keep It Simple

Post by goingup » Tue Oct 31, 2017 8:37 am

jbow44 wrote:
Tue Oct 31, 2017 8:00 am
Thanks goingup and gostars. I don't mind being hands on and making the moves periodically but I find myself checking on things probably more than I should or need to. Plus if it's going to cost me money to make those moves it becomes more obvious that simplicity is the master key to success. :beer

With that I'll likely be taking your wise advice.

Be well!
My observation, after several decades of investing, is that our automated accounts (401K,403B) have better returns than the accounts where I have directed purchases. Automated purchases happen consistently, on schedule, and never mull, consider or delay like I do.

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