My question concerns my 401k account through work. We have been fully invested with Vanguard funds; however, we have recently been forced to transfer all our funds to T D Ameritrade brokerage since Vanguard is no longer supporting small company 401k accounts at its brokerage.
This all fine except that after the first year at Ameritrade all the Vanguard funds will incur a transaction fee to trade in or out of. This will be unacceptable in my opinion so I need to change something.
I have researched correlated NTF funds to replace the Vanguard offerings with, but they carry higher expense ratios, usually .50 to 1.00 higher than the Vanguard fund.
Do you think I would be better off to switch to an all ETF portfolio and incur the commission for each trade up front, or go with the NTF funds with the higher expenses?
You are actually very fortunate to have that choice. Many 401ks do not offer ETFs at all leaving the participants stuck with mutual funds and their (at times) severe trading restrictions.
Personally, I would go with the ETF set up; no questions about it. Trading costs are negligible these days, especially if your investment horizon is long term and you don’t engage in day trading.
It’ll also make it easier to follow my trend tracking approach, if you’re so inclined, along with the use of trailing sell stops. My weekly StatSheet will provide you with the backup information to hopefully assist you in making more successful investment selections.