I have Edward Jones as a broker. I keep asking about Index fund, and he keeps steering me away from index funds.
Should I purchase index funds and if so, should I buy from him or go direst to someone like Vanguard.
Terry Says: If you go to a traditional brokerage firm like Edward Jones, you are paying commissions or fees to a broker for his or her investment advice. They give you specific stocks, or mutual funds that utilize commissions, typically upon purchase. Now, it can be ok to pay for a broker’s advice if they are helping you “beat” market returns. But if you just want a diversified portfolio of stocks, then you buy an index fund. You do that through a fund company like Vanguard or Fidelity, either using their toll free number (800-Fidelity or 800-Vanguard) or online. It’s easy, no broker to help — just send in your check, or write transfer the money — or do a direct IRA rollover. So the cost is very low on an annual basis, and no commissions upfront. Over time, those lower fees add a lot to your long-term investment performance.