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Moving my Roth in this market?

November 3, 2008

I’ve been wanting to move my Roth IRA from Fidelity to Vanguard all year. But with all the market volatility, I’m nervous. When I did a 401k rollover, they had to mail me a check (made out to Vanguard), and I had to mail it on to Vanguard. It took over a week. I’ve seen charts about what happens if you miss the best days in the market (or what happens if you miss the worst), and I’m just nervous. Though it would have been sweet to miss out on a couple weeks of October.

My other thought was to just start up 2009 and only contribute to Vanguard, and transfer later. I’d have to dump in $3k right away rather than dollar cost averaging through the whole year, which is possible, but not preferable. I don’t think now is the time to throw DCA out the window, and that counters my goal of upping my cash reserves..

Why do I want to do this? The expense ration is .2 rather than .8, and it would also eliminate Fidelity from my financial life.

Hmmm…. What do you think?

5 Comments leave one →
  1. November 4, 2008 2:47 pm

    I made the same move a couple years ago. I love Vanguard and my only quip is that they have those $3K min. intial investments! I just figure that I am young and any loses due to not dollar cost averaging (DCA) can be made up with time. Also, I’ve seen research for and against DCA. I think the best aspect of doing DCA is psychological- in other words it keeps you investing regularly over time. You’ll do that in the future, so this one time shouldn’t matter much. Anyways, there is no way to predict when those good days will be… so just make the jump!

  2. November 5, 2008 12:32 am

    Why are you getting rid of Fidelity?

  3. November 5, 2008 4:10 pm

    The expense ratio is .2 at vanguard and .8 at fidelity. Also, I already have a rollover IRA and some money market accounts at Vanguard, so I just want to consolidate.

    Fidelity isn’t bad though. I’ve liked them. That is why I hesitate!

  4. November 9, 2008 11:10 pm

    I’ve had accounts with both Fidelity and Vanguard in the past. While Vanguard funds have some of the lowest expense ratios in the industry, you can purchase Vanguard ETFs through Charles Schwab and get the low Vanguard fees without their trading restrictions and high minimums.

    Don’t worry about missing the best and worst days of the market. Most of those days occur when the market is below it’s 200-day moving average. If you switch from DCA to a Global Tactical Asset Allocation strategy you would be 100% in the safety of money market funds and treasury bonds right now, waiting for a better opportunity to get into the market.

  5. November 10, 2008 8:28 pm

    That’s interesting. I’ve always used Fidelity but never really questioned it. I don’t really buy their mutual funds; just do standard index funds.


    With the market as it is, it really doesn’t mattter now does it! 🙂

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