UnThreaded | Threaded | Whole Thread (44) | Ignore Thread Prev | Next
Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75376  
Subject: Re: Roth IRA acct and safekeeping fees Date: 10/1/2013 6:10 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
dsr10,

You wrote, Scottrade seems to be a good choice. It would allow me to get my feet wet with a minimum initial investment, with low to no fees involved (correct me if I'm wrong there, please).

Hold on there! I used to have a Scottrade account. I no longer recommend them. Other brokers offer similar pricing with a better mix. Also Scottrade is one of the few brokers that lacks a no-transaction fee ETF offering. Transaction fees are very important when you're making small purchases and all major brokers now offer a line of no transaction fee ETFs.

Also, So. I open a Roth IRA account with Scottrade, investing $500. Looking around I think the Schwab SCHX ETF might just be a decent choice for a long term investment. SCHX tracks the Dow large cap total stock market index, appears to have a low expense ratio, and I'm comfortable with their current major holding....granted, with my limited knowledge that doesn't say much. Some of you may ask why I wouldn't just buy direct from Schwab save the $7 cost of buying the ETF, it's a good question and the only answer I can give is: it allows me to get in at only $500 and over the long run that $7 wouldn't really kill me.

Schwab may not let you open an IRA with only $500; but other brokers will. Try TD Ameritrade. They have no account minimum for an IRA. They also offer 101 no transaction fee ETFs. All of these ETFs have reasonable to ultra low expense ratios and are issued by well-known companies like Vanguard and iShares.

SCHX is very like a basic S&P 500 index fund. If that's your objective, you can open an account with TD Ameritrade and buy IVV with no fees and just your $500. The expense ratio is slightly higher - 0.07% instead of 0.05%. That will cost you 10 cents in performance in the first year and will likely take you 30-40 years before the expense ratio reaches the $7 commission you'll pay at Scottrade.

Finally, Is something like SCHX a decent beginning investment? Am I an idiot to consider getting that through Scottrade instead of just going to Schwab directly?

Yes, SCHX is a decent beginning investment. No, you're not an idiot for considering it. But you haven't considered the cheapest combinations yet...

- Joel
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (44) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Post of the Day:
Macro Economics

The Future, or What's Left of It
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement