(02-08-2018, 08:39 PM)HandsomeRob86 Wrote:

(02-08-2018, 08:31 PM)Senor Fantastico Wrote: I really like Vanguard because they have very easy to understand funds but I feel that Fidelity and ETrade are both solid as well. I believe both of the latter allow you to attach a checking/saving account as well. I know Charles Schwab does. I also like a newer one called Motif but they’re much less established if that’s a concern.

What is the view on Vanguard funds vs say an index fund? It is my understanding that Vanguard can create its own deals similar to Warren Buffett and that is what allows it to outperform the market, (i.e. like Buffett getting a huge amount of BoA when it was down in a backroom deal, and everyone scrambling to follow as the stock shot up). I am curious what you others think on the benefit/cost ratio of having big players funds.

Vanguard is a brokerage.   It's not "doing deals" like Warren Buffett.  Vanguard has a very popular index fund, I think it's one of the original index funds.  I would highly recommend Vanguard's index fund.  

The idea is to invest and let time do the work.  The average investor has no business picking stocks, or picking sectors, or timing the market.  The approach I would take is:

1) Make sure you set aside enough money so no matter what happens, you will not have to sell your investments. 
2) Invest for the super-long term, by which I mean, never sell. 
3) As soon as it is possible, diversify.  Stocks, bonds, real estate.  

The very best long term investment is a diversified set of profitable businesses.   <That's the stock market.  Remember, when you buy a stock, you are buying a share of a business.  The stock market goes up and down, but over the long run it outperforms everything else, and for good reason.   An S&P500 index fund is a set of 500 of the very best American businesses.   And that's why that index fund will outperform everything else over the long haul, through booms and busts, Democrats and Republicans, war and peace.  Buy and hold, never sell.   Because those 500 businesses are led by the smartest, most ingenious people in the world, whose goal in life is to make money, and you should invest in those people and forget about picking stocks.  Invest in the S&P500, and sit back and let all those brilliant business people make you money.

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