I’m still pondering my portfolio options (one, two, three), but a good question is why I’m not looking more seriously into using ETFs instead. To be sure, there are plenty of good reasons to go with either mutual funds or ETFs. Besides wanting to dollar-cost-average, I’ll admit that I have another reason against ETFs that isn’t fully logical, but is still important to me. I’ll throw it out here and see if I’m the only one.
Here it is: If I’m going to put a huge hunk of my money at a financial institution, I want it to be at a dependable place that I feel comfortable with. That’s why I like Vanguard and Fidelity. They have many differences, but they are both dependable companies that I feel are solid and have provided me with excellent customer service up until now.
For me to go with ETFs, to avoid commissions affecting my returns, I would want to go with a discount broker. But there are so many discount brokers out there, and what is a good broker today could merge with a horrible broker tomorrow. For example, BrownCo merged with E-Trade. Ameritrade already ate up National Discount Brokers back in 2001. Now TD Waterhouse merged with Ameritrade. Who’s to say tomorrow we won’t have TD-Amer-Etrade, along with E-Trade’s horrible customer service?
I’m happy with my Ameritrade I-Zone broker right now with their $5 trades, but that’s because I only have $5,000 in there. I can’t speak to a human with them, and that is unacceptable for large amounts of money. If they merge with E-Trade, I’m running the other direction no matter what.
It’s one thing to move some cash in between banks, but I plan on keeping hundreds of thousands of dollars in my main broker, and I want them to be around when I actually do retire. So that’s why I am most likely going to stick with Vanguard. Every time I call them, even with a stupid question, I get an educated person who picks up in less than 5 minutes and helps me. Is this worth any potential gain from using ETFs? Or am I just being a old fart?