Description: The article is about vanguard login. This is tutorial about how to open an investment account through vanguard. The author also gives his own suggestions on which type of investment products you can choose to start your investment.
This is Kevin Wong. Today I’ll give a tutorial on how to open an investment account through vanguard. The target audience I’m directed towards are US citizens and those who have the US address. You will need a bank account and you need to be at least 18 years old in order to open up a individual Vanguard investment account. I’ll cover how to open up a brokerage account through Vanguard to purchase stocks and ETFs as well as the portfolio that I began with when I open up my own lane guard accounts.
Here’s the process for opening up individual accounts. It’s quite straightforward. You can go to the Vanguard.com and you can type in your personal information. Then you are ready to go. This is the confirmation you will get at the end such as your individual account number.
I recommend choosing non-retirement for investment purpose because this account is for general investing and general savings. Here is your funding method. I chose electronic bank transfer from my bank account. It is from Chase. You will begin by transferring initial sum of money into your investment account. I chose $5,000 to begin my investment.
I put the $5,000 in my investment account in the prime money market fund. This is the process of putting your money when it’s not being invested in anywhere else. There’s personal information here.After you open your individual investment account and you want to buy ETFs stocks and bonds,you have to open up a Vanguard brokerage account in order to do so.
The brokerage account is for buying stocks and securities. It gives you more flexibility in investment and I highly recommend opening a brokerage account. The process for opening up a brokerage account is also quite straightforward. There are also some things that I’ll cover. That may not seems so straightforward. Where’s the money I used to fund the new accounts? I will say at Vanguard.
You can move money from existing Vanguard fund into the new account. The existing Vanguard fund is from your money market fund and from your individual investment account. So the two accounts would be synced together. I choose prime money market fund to the money market fund to settle my brokerage trades. The amount is $5,000. and this is from my individual investment account.
As I said before a money market is a place for you to put your money when it’s not being invested. The world market is in there. You can gain significant returns. Over a long period of time as I show on this graph for past ten years in comparison to the Vanguard total International stock index and vanguard 500 index,there are no significant changes in how the Vanguard prime money market perform. You can simply put your money in there ten years ago. It’s essentially the same amount. There are more volatility in the p500 total international stocking decks. I recommend not transfer your money to the money market through dividends.
You can choose how you like to fund your brokerage account when you are selecting your funding method. Along with opening brokerage account,you will be asked if you’re an associated person or a control person. Through any application process,you shouldn’t say yes to everything.
Here I will define what means to be an Associated person. It means someone who is affiliated with the securities firm. For example, NASDAG firm. NASDAQ is a system for trading securities. A control person is anyone who can control and influence the issuing company.
The issuing company means a financial institution that offers its own products for sale to investors. If you’re a director an officer or a significant stockholder of an issuing company,you’re a control person. I’m done of these two things. when it asks for am I an associate or a control person,I will put no.
This is the confirmation you get after you open your brokerage account. For the brokerage account information it’s an individual account type. I selected the prime money market fund to settle my settlements. I chose to reinvest my brokerage dividends and here are my personal information.
Before you buy ETFs and stocks,you have to agree to Vanguard terms and services with the New York Stock Exchange,NASDAQ. They will ask if you are not professional or a professional investor. Non professional is simply one person who obtains information for his or her own investment purposes and not for any business purposes. This is what I fall under. Probably for most people they are non professionals because they are doing it for themselves.
Professionals are those who are registered or qualified with the following or four equivalents. If they’re registered or qualified under a security agency then that person is a professional. This is the confirmation you will get after you agree to their terms and services. Here’s the table on the commissions and fees of Vanguard’s brokerage services.
This is organized into the valuation of your assets and Vanguard funds in Vanguard ETFs. For myself I began with $5,000. I fall in this category. What interesting is from Vanguard ETFs,they’re free for Commission for everybody. I have to pay a fee in purchasing stocks and non Vanguard ETF.
What are the ETF and index funds? They’re very similar. An ETF is a security that tracks an index,commodity or a basket of assets. It trains like a stock on the exchange. ETFs means you can buy or sell any time during the day and for some organizations you have to pay a commission.
As I’ve said before,through Vanguard there is no commissioner free through purchasing or selling ETFs. It’s throughout the day,there are price changes throughout the day. The thing is if you’re not a US citizen you cannot buy index funds at Vanguard. Here’s the portfolio that I began with when I opened up my brokerage account. I chose five assets. They are all ETFs.
First one is total US stock market. Second one is Mid Cap Growth. REIT stands for real estate investment trust. The fourth one is information technology and the fifth one is financial. I purchased a thousand dollars worth of shares per ETF. You can look at my portfolio.
I don’t have any form of bond allocation because I’m still young and I can take more risk and I’m investing for the long term. I don’t need that bond allocation for stability. I think I can take risk. By looking at the US economy at that time,I thought real estate technology and financial services seemed to be most promising. I invested in these sectors through REIT information technology and financial and I am covering the rationale for purchasing each of these assets.
I bought this because I saw there’s historically a nine point four four percent annual rate of return per year in the US stock market. This was shown over the past twenty five years. There’s very high probability that the US will continue to have over the next years.
I purchased REIT ETF. REIT stands for real estate investment trusts. Its investment trusts are directly investing and managing in real estate such as commercial properties and mortgages. This shows the mortgages because the cost of a mortgage is through the interest rate. For information technology ETF,I decided to buy into this because the pace of technology is accelerating exponentially.
In the long run I can expect returns. Information technology is the application of computers and telecommunications to store retrieve transmit and manipulate data. Why I choose the financials ETF? This is because the financial sector had a huge hit from the recession. But recently is recovering. Recently Warren Buffett shown in Berkshire Hathaway has a large stake in Wells Fargo.
An eight point nine percent stake is equivalent to roughly fifteen point six billion dollars of February. Berkshire Hathaway’s coke stake was valued at fourteen point five billion dollars. For mid-cap Growth ETF,I decided to purchase this because in times of recessions,mid-cap companies suffer more than large cap companies. Mid-cap means middle capitalization which means a company with with capitalizations of two to ten billion dollars. They suffer more because compared to large cap companies,you don’t have enough resources.
They’re more rely on domestic markets . They’re smaller. But their prices are lower now than before because of the drop in the economy. So we can expect mid cap companies to bounce back and to grow after the recession. This is why I purchased Vanguard mid-cap Growth ETF.
With all my ETFs,you can make specific type of orders or four types. For all of them I have marked your orders because I bought them at the best available price. I want to hold on to those shares as soon as possible. With the longer time I hold on to them, the more possibility they can grow based on the time.
A limit order means you buy order at or below your limit price. Do limit sell you will sell at or below your limit price. You can do stop order which is known as stop-loss order. It’s usually for selling. If you want to cash out you can do stop order.
You can also do stop limit which is usually for selling and you would sell below the stop price and above the limit price. For example you place a stop price at $15 and a limit price at $14,the order is executed only between $15 and $14. Here is my account activity after I purchased my ETF. You can see I have 13 shares. You can only purchase a single.
You can only purchase whole numbers of shares because you can’t purchase half a share. They need to be whole numbers. Here are my balance and holdings after my trains have gone through. Here I have these ETFs under my possession. The thing is under here it says net credit debit. It shows negative four thousand nine hundred seventy four dollars.
There’s a negative sign,does this mean you had to borrow money in order to make your purchase? No. This is misconception. In fact that debit means the money you owe for the purchase of a security. The money is reflected as net debit until the close of business on the settlement date of the trade. So when the settlement date occurs,Vanguard brokerage services automatically withdraws or sweeps money from the money market settlement fund to settle the trade.
After the sweeping looking our balances and Holdings,the net credit debit goes to zero. Vanguard prime money market fund is reduced because the net debit was settled by taking the funds from here and settling this amount. So I recommend for having an investment account after you allocated your portfolio and purchased your ETFs.
You can have regular intervals to check your account every month to see the performance of your account. You need to remember that you’re investing for the long run. Don’t worry if you don’t experience significant change in a short amount of time. You can put aside a few hundred dollars in order to add to what you have already or to rebalance portfolio. It’s up to you. The allocation is more personal preference.