Official Investing Thread

Discussion in 'The Mainboard' started by Joe Louis, Jul 12, 2010.

  1. dirtybert

    dirtybert Well-Known Member

    I second this. We use a regional bank for our SF rentals. Better rates/terms, easier to deal with, etc.
     
    Anison likes this.
  2. Struggler

    Struggler Well-Known Member
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    tree fiddy %. The rest goes into shitcoins.
     
  3. Chumbolone

    Chumbolone Well-Known Member
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    I’ve only used HML’s in the last ten years, but just shop around, I know people who’ve gotten good rates w online lenders. Region/area dependent a lot of the time.
     
    Ty Webb likes this.
  4. ned's head

    ned's head Well-Known Member
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    I normally just throw my money in VOO. Proceeds from a house sale came in and had a couple of q's for the board on a larger investment:
    1. If I stick with a total market/s&p fund, is there any value in diversifying issuers? The holdings probably wouldn't vary much between vanguard and ishares for example, but is there any issuer risk that should be considered (i.e., a PM fraud or accounting scandal at vangaurd)?
    2. For those that have invested in VT (world fund), are there any tax oddities? I remember I had one international fund that paid foreign dividends, but the position was small and my tax software always handled it pretty easily.
     
  5. NothingIsOT

    NothingIsOT Fuller is a sarcastic asshole
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    I'd have to look at the underlying, but my gut says 98% sure you'll have foreign dividends and investments with VTI.

    I wouldn't worry about diversifying between SPY or VOO, because risk of an accounting scandal. I'm not sure how you perpetuate a fraud, given the underlying are level 1 assets, so it's easily audited. Has there been a recorded case in history of funds with vanilla underlying assets with fraud? I know there have been with complex derivatives, but I can't think of anything that comes to mind with a vanilla fund.
     
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  6. billdozer

    billdozer Well-Known Member
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    Here's a thread on VT and its tax efficiency.

    I would have no concerns with an index fund having fraud or a scandal.

    https://www.bogleheads.org/forum/viewtopic.php?t=237427&start=50#:~:text=VT is very tax-efficient,of VTI/SCHB/ITOT.

    The key item I saw in the thread:

    VT is tax efficient in that 88% of the dividends are qualified

    However you can not deduct the foreign taxes from your tax return. Last I heard that was about the equivalent of a .12% drag to the fund. So basically instead of it costing you just .08% for the expense ratio it is costing you an additional .12% in taxes so essentially it is costing you .20% in total expenses

    That is why many recommended holding international ETFs separate so you can deduct foreign taxes. One of the more tax efficient foreign ETFs is VEA (developed markets) as qualified dividends are 80% and you can deduct the foreign taxes too

    I hold almost all my equites in tax privileged accounts but have some money in taxable brokerage to invest. I am leaning towards VTI and VEA, but part of me likes the simplicity of VT, but it bothers me to lose the foreign tax credit.

    Essentially you are being double taxed because foreign countries are taxing you and you are also paying US income tax on these dividends too.
     
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  7. ned's head

    ned's head Well-Known Member
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    That was my initial thought. No company is immune from scandal, but as long as it's holding what it claims to hold, I guess it should be pretty safe.
     
  8. ned's head

    ned's head Well-Known Member
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    Interesting; thanks! I'll be in a taxable account. Any thoughts on the value of global diversification when primarily holding S&P and total US funds? It seems like our market will drive the performance of other markets to some degree, so it may not be worth it
     
  9. billdozer

    billdozer Well-Known Member
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    I've read on it a lot, and their are mostly 2 factions. Most of these viewpoints are from a Boglehead/index fund perspective, so keep that in mind.

    1. US companies are international now, so you already have international diversification, or
    2. It's better to have full diversification. From a P/E standpoint, the US is close to 2001 limits, while the international aren't.

    There doesn't seem to be a set rule of thumb on how much international to have, if any, so I personally settled on 20-25% mostly total international with some emerging markets. But I'm also 99.9% in tax advantaged, so the taxes part doesn't matter to me.

    International has underperformed US for the last 10 years, so I haven't been as good as a straight S&P 500, but I'm ok with that.
     
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  10. construxboy

    construxboy xenForo is the new TMB
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    I'd almost recommend an Emerging Markets fund over a Mega Cap Intl fund for diversification benefits.
     
  11. billdozer

    billdozer Well-Known Member
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    Clemson TigersCarolina Panthers

    Right now 15% of my portfolio is IXUS and 6% is IEMG.
     
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  12. Lyrtch

    Lyrtch My second favorite meat is hamburger
    Staff Donor

  13. Wee Bey

    Wee Bey Well-Known Member
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  14. Arliden

    Arliden Well-Known Member

    Honestly coming back to this not sure how this guy can be taken seriously. It seems like hes trying to create a nice spin on the Fed.

    Lets make it clear the Fed had to do what it did in that time frame, because of past decisions, the petrodollar, the US's position in the world, and the overall unprecedented situation. I don't blame them, they had to do what they did given the pandemic. But some of his comments are a joke.

    "No, the Fed isn't wildly printing dollars to pay the government's bills" "This shows up as a rise in monetary aggregates, but it's not "printing money" "
    I mean thats laughable


    "And the Fed bought around $2 trillion in USG debt, which paid for the aid packages that made it possible for households to put all that money in banks"

    oh so you mean they bought treasuries and then printed trillions of dollars new money and sent it to pay the governments bills? (see first bold sentence)

    "This might sound pointless, but there were some major risk perceptions — the whole system almost froze up in March 2020 — which the Fed controlled by stepping in as intermediary. And it's not a problem! In particular, no, the Fed wasn't inflating away private wealth"

    Yes what the Fed did at the time was the right thing to do and what needed to happen there is no denying that but to act like they aren't printing dollars is a joke.

    "But bank deposits are counted in M2, so if you have a crude view that thinks everything in M2 is like freshly minted Venezuelan bolivars, you start shrieking about inflation."

    [​IMG]
    No shit not everything in M2 is freshly printed dollars but thats strawman shit but clearly we have had a significant change in one year year compared to 50 years of history prior.
     
    #25364 Arliden, May 28, 2021
    Last edited: May 28, 2021
  15. Lyrtch

    Lyrtch My second favorite meat is hamburger
    Staff Donor

    Goldbugs still existing is wild. Same with Austrian school folks.
     
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  16. Arliden

    Arliden Well-Known Member

    "And it's not a problem! In particular, no, the Fed wasn't inflating away private wealth"

    That wasn't their thought initially but Im pretty certain that will be the case going forward for people owning treasuries. With our debt being 130% of GDP, we have a debt problem we aren't going to solve by reducing our budget. Only way it will be resolved is devaluation and allowing inflation to run hot while keeping interest rates low and inflate our debts away.

    [​IMG]
     
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  17. Lyrtch

    Lyrtch My second favorite meat is hamburger
    Staff Donor

    we spent 40+ years running the economy cold, undershooting GDP targets, over estimating inflation the entire time, and people think we shouldn't re-evaluate the neoliberal policies that got us there. it spiked economic inequality by never getting full employment which is the way to spark wage growth as well as the hand-in-hand deregulation and "free market" mythology. it was all an intellectually astroturfed scam to make the rich richer and let capital flow upwards unimpeded. that people still believe in this ideology is wild (except for the crypto folks, because it's just an updated goldbug argument so it's really obvious why they sell it).

    we mmt now
     
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  18. Arliden

    Arliden Well-Known Member

    Lol when people decide to remove certain variables out of the way to explain away something. Supply shortages have existed in all the past inflation spikes, the 40's were war related labor and commodity shortages, and the 70's had the oil embargo.

    Inflation will probably run hot for the next couple months and roll over, the bigger question is where will it ebb down to over the next 6 months, will it go from 6% down to 4.5% down to 2.8% back up to 3.5% back down to 3% back up to 4%? And then as Mr. Krugman alludes to is when we are running full steam ahead beginning of next year and if Biden can pass several of these trillion dollar packages he wants to push will we start to overheat and see another spike?

    [​IMG]


    Inflation isn't a linear line, you can see the separate spikes of inflation in the 40's.
    But what you should note is each spike resulted in a step up change in consumer prices, it never retreated back to prior levels.

    All that being said is I'm not afraid of inflation, people just need to be aware of it and prepare themselves for it. Honestly I hope it results in wage inflation personally, and I hope we get rid of the petrodollar system cause it is harming 90% of this country and enriching 10%.
     
  19. kinghill

    kinghill Well-Known Member
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    Hey I'm just coming back to this, I'm using your layout for my portfolio spreadsheet, but I noticed it doesn't calculate % allocated per type of investment... such as "80% us stocks, 20% intl stocks, 10% bonds" or whatever. Is that type of allocation something you consider or look at?


    with that said, how would you even do that with a target retirement fund like the Vanguard 2050? Look at the underlying funds and the %'s that Vanguard allocates and add those to your spreadsheet? Does anyone actually do this?
     
    #25369 kinghill, May 29, 2021
    Last edited: May 29, 2021
    Nashville Knight likes this.
  20. dukebuckeye

    dukebuckeye P.G.I.T
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    Trying to figure out other investment vehicles.

    Currently, I max out my 401k contribution, don’t qualify for a Roth, have four 529 plans, put a bunch of money in ETFs and individual stocks monthly, etc.

    What do some of you guys do?

    I’m considering things that’ll pay me like rental properties, but I’m not necessarily dying to be a landlord.
     
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  21. Lyrtch

    Lyrtch My second favorite meat is hamburger
    Staff Donor

    backdoor roth in you and your wifes name
     
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  22. dukebuckeye

    dukebuckeye P.G.I.T
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    Can you explain this to me like I’m 8 years old?
     
  23. Jimmy the Saint

    Jimmy the Saint It's like the Weimar Republic in that place
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    Start by not overpaying your taxes by five figures.
     
  24. Arrec Bardwin

    Arrec Bardwin He ain’t me, he can’t be me
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    Have you heard of our lord and savior Bitcoin?
     
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  25. dukebuckeye

    dukebuckeye P.G.I.T
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    I’m in Bitcoin, Litecoin, and Etherum. Just a small bit though.
     
  26. Lyrtch

    Lyrtch My second favorite meat is hamburger
    Staff Donor

    no income barriers to roth conversions so if you put 6k into a traditional IRA then convert it to a Roth you're good (and also in your wifes name to get $12k/yr)

    can't have regular IRA's hanging out there though. vanguard makes it stupid simple.

    https://www.investopedia.com/how-to-set-up-a-backdoor-roth-ira-4584775
     
  27. dukebuckeye

    dukebuckeye P.G.I.T
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    Lol. I’m planning to fix that this year.
     
  28. dukebuckeye

    dukebuckeye P.G.I.T
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    Thank you
     
  29. Jimmy the Saint

    Jimmy the Saint It's like the Weimar Republic in that place
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    :blessed:

    Back door Roth for sure.
     
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  30. dukebuckeye

    dukebuckeye P.G.I.T
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    Thanks fam
     
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  31. Struggler

    Struggler Well-Known Member
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    Any chance you’re looking for another dependent?
     
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  32. dukebuckeye

    dukebuckeye P.G.I.T
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    For another $2k tax credit?

    Saddle up, partner.
     
  33. Jimmy the Saint

    Jimmy the Saint It's like the Weimar Republic in that place
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    You get a new CPA or just get tired of the government holding your money?
     
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  34. dukebuckeye

    dukebuckeye P.G.I.T
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    Same CPA. Irritated with the government still holding onto my federal tax return from 2020. Filed for it almost three months ago and it’s still being processed.

    They had no problem sending me a $3100 tax bill from 2018 though that I had to pay in the meantime.
     
  35. Jimmy the Saint

    Jimmy the Saint It's like the Weimar Republic in that place
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    Yeah the IRS has done a great job prioritizing that.

    I do corporate tax and they’re still holding almost a million we requested to be refunded last year.
     
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  36. letan

    letan Just looking for the gator board
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    I was talking with our tax reporting dept earlier this year and they said it’s completely normal for the IRS to take 18 months to process refunds back to us. Typically like 5-10 mil too
     
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  37. dukebuckeye

    dukebuckeye P.G.I.T
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    But if you owe them, that shit is due in 30 days motherfucker
     
  38. Jimmy the Saint

    Jimmy the Saint It's like the Weimar Republic in that place
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    Yeah, the higher the dollar amount the harder/longer it gets. Under a million, even slightly, isn’t usually this onerous though.

    Unless you’re in the territory you’re talking, never ask for $1m. Draws a lot more scrutiny.
     
    letan likes this.
  39. burnttatertot

    burnttatertot Super Necessary
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    Properties are nice but they can be time vampires, especially if you prefer to take care of issues yourself and not call someone else.

    If you're in and out of individual stocks like I was a lot last year make sure you're tax harvesting at the end of the year. It saved me thousands. Backdoor Roth appears to be your first step though.
     
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  40. Chumbolone

    Chumbolone Well-Known Member
    Notre Dame Fighting IrishChicago CubsChicago BullsChicago BearsChicago BlackhawksChicago Fire

    [​IMG]
     
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  41. jcb-r

    jcb-r Back and better than ever
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    CPA here. Want a mind blowing statistic? I was speaking to our firm's IRS controversy group on Friday regarding an issue one of my corp clients was having. They mentioned that there are still 29 million returns from the 2019 tax year (i.e. returns that were filed in 2020) that still have not been touched or processed. You're likely not getting your 2020 refund for a while. It's honestly absurd.
     
  42. Gotch Yarbrough

    Gotch Yarbrough Canada eh?
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    That stat would be more mind blowing if it were actually true and not a misrepresentation of an actual statistic.
     
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  43. Seavie

    Seavie Loading tweet...
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    I want to ask a very focused question...

    For my 6k a year that I can put into my Roth IRA, I currently have it all in VFIAX..

    My brokerage account is with Schwab. Kind of wish I would have gone with Schwab's equivalent and saved the transaction fee, but it is what it is.

    Looking for insight/recommendations of possibly switching this up. If I stick with a mutual fund I'd likely just go with Schwab's equivalent. If I went with an ETF it wouldn't matter.

    -What index do you recommend tracking? S&P 500, entire stock market, etc
    -Mutual fund or ETF?
    -Would you consider going to an actively managed fund? Everything I read says don't do it. Returns over the long run don't beat passively managed funds. And the expense ratios eat more of your return.
     
  44. NothingIsOT

    NothingIsOT Fuller is a sarcastic asshole
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    Never actively managed, unless you know the people on the other side of it personally and they can explain their advantage. For the common man, always go passive.

    SP500 v. VTI is probably a wash and just a preference. In finance theory, VTI works better given the “alpha” you would get in high growth economy, but it’s hard to argue against a USA focused portfolio given how quickly we are to print money, cut taxes, reduce expenses v. compared to other countries, etc. I don’t think you go wrong either way. Also, remember the SP500 naturally has exposure to the whole world anyway given the multi-National size of companies. VTI is also going to be mainly the same companies anyway.

    You could go 50/50 if you want to hedge. No one knows how things will be in 30 years.

    ETF over mutual fund. I put my entire balance into VOO (S&P500 etf) and VTI (total world etf). Generally balanced between them but I don’t stress about it, as long as I’m fully invested.
     
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  45. Seavie

    Seavie Loading tweet...
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    Any advantage in going with SCHD (or another brokers equivalent) for high dividend yield? Would have dividends reinvested no matter what index/fund but would that make more sense given I can't contribute any further once 6k is reached each year?
     
  46. NothingIsOT

    NothingIsOT Fuller is a sarcastic asshole
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    Finance theory land here.

    Most companies that do pay a dividend have about a 3% dividend yield or less. Once you push past 5%, I’d be concerned about the companies fundamentals. There’s some undervalued stocks, but the street is typically telling you the dividend isn’t sustainable.

    In theory, a company paying out a dividend is giving up if you will. They can’t find a better way to reinvest in CapEx to grow the business further, hence growth in the company is limited and your stock price upside is limited. Now, there’s some companies that throw out a small dividend to be included in dividend ETFs, so they can artificially boost their stock price. So my point isn’t all right. AAPL pays out a small dividend. I think Microsoft too.

    Roundabout way of say if your goal is diversification and reduce risk, it’s worth a shot. The company is most likely to show consistent earnings to justify the payout. However, if your goal is to grow your portfolio regardless of diversification, I’d stay away from dividends. SPY (SP500 ETF) on most timelines out performs SPYD (SP500 dividend ETF). Dividends are something I’d err to if I was within 10 years of retirement. Anything longer, I’m personally passing.
     
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  47. kentucky_dawg

    kentucky_dawg Fan of: Georgia :\
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    Can you expand on this? Curious to hear why
     
  48. The Hebrew Husker

    Donor
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    This post reminded me that I hold POMIX and PRDGX in my Roth IRA, and they must overlap in terms of holdings because their YTD and overall performance are within 1% on both. Figured I would see how the top holdings compare.

    POMIX:
    Apple Inc 4.69%
    Microsoft 4.34%
    Amazon 3.23%
    Facebook 1.73%
    GOOGL 1.51%
    GOOG 1.48%
    Tesla 1.23%
    BRK.B 1.18%
    JPM1.09%
    Johnson & Johnson 1.01%

    PRDGX (Dividend Growth):
    Microsoft 5.42%
    Apple 3.49%
    T. Rowe Price Gov. Reserve 2.88%
    Visa 2.70%
    JPMorgan 2.29%
    Danaher Corp 2.27%
    UnitedHealth Group Inc 2.15%
    Accenture PLC 1.82%
    Comcast Corp 1.68%
    Texas Instruments Inc 1.62%
     
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  49. Arrec Bardwin

    Arrec Bardwin He ain’t me, he can’t be me
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    Usually lower fees and no early withdrawal fee
     
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  50. MORBO!

    MORBO! Hello, Tiny Man. I WILL DESTROY YOU!!!!
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    Looked at my company provided 401(k) account this morning. Saw I've gotten 5% growth YTD. Was curious which fund they defaulted into putting my cash. Looks like they defaulted to 100% in the "Vanguard Lifestrategy Moderate Growth Inv." Then I started looking at what my options were and there was a nice long list.

    Vanguard Lifestrategy Moderate Growth Inv
    Blackrock Mid Cap Growth Equity Portfolio I
    Columbia Small Cap Growth I Institutional 3
    Dfa Emerging Markets Core Equity I
    Dfa Global Real Estate Securities
    Dfa Real Estate Securities I
    Dfa Us Large Cap Value I
    Dfa Us Small Cap I
    Fidelity 500 Index
    Fidelity Mid Cap Index
    Fidelity Total Market Index
    Gmo Quality R6
    Ivy Mid Cap Income Opportunities I
    Janus Henderson Global Equity Income N
    Janus Henderson Small Cap Value N
    Mfs Intl Diversification R6
    Morgan Stanley Insight Is
    Morgan Stanley Institutional Fund, Inc. Global Opportunity Portfolio Class Is
    Morgan Stanley Institutional Fund, Inc. International Opportunity Portfolio Clas
    Touchstone Mid Cap Y
    Vanguard Developed Markets Index Adm
    Vanguard Health Care Index Adml
    Vanguard Information Technology Index Admiral
    Vanguard Lifestrategy Conservative Growth Inv
    Vanguard Lifestrategy Growth Inv
    Vanguard Lifestrategy Income Inv
    Vanguard Small Cap Index Adml
    Vanguard Target Retirement 2015 Inv
    Vanguard Target Retirement 2020 Inv
    Vanguard Target Retirement 2025 Inv
    Vanguard Target Retirement 2030 Inv
    Vanguard Target Retirement 2035 Inv
    Vanguard Target Retirement 2040 Inv
    Vanguard Target Retirement 2045 Inv
    Vanguard Target Retirement 2050 Inv
    Vanguard Target Retirement 2055 Inv
    Vanguard Target Retirement 2060 Inv
    Vanguard Utilities Index Admiral
    Victory Trivalent International Small Cap R6

    Now, of course, problem is that I have little idea of the difference between these, what I should go with, etc. I'm maxing out my 401k, and I'm 36 y/o, fwiw. Thoughts?