Ask Terry Questions index funds not at my broker

index funds not at my broker

By Terry Savage on February 15, 2015 | Investments

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.



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