Group rationality diary, 1/9/13

cata

This is the public group instrumental rationality diary for the week of January 7th. It's a place to record and chat about it if you have done, or are actively doing, things like:

Established a useful new habit
Obtained new evidence that made you change your mind about some belief
Decided to behave in a different way in some set of situations
Optimized some part of a common routine or cached behavior
Consciously changed your emotions or affect with respect to something
Consciously pursued new valuable information about something that could make a big difference in your life
Learned something new about your beliefs, behavior, or life that surprised you
Tried doing any of the above and failed

Or anything else interesting which you want to share, so that other people can think about it, and perhaps be inspired to take action themselves. Try to include enough details so that everyone can use each other's experiences to learn about what tends to work out, and what doesn't tend to work out.

Thanks to everyone who contributes! Happy New Year to folks; my resolution is to always post these on Monday evenings instead of letting them slip to Tuesday or Wednesday : >

Previous diary; archive of prior diaries.

This is the public group instrumental rationality diary for the week of January 7th. It's a place to record and chat about it if you have done, or are actively doing, things like:

Established a useful new habit
Obtained new evidence that made you change your mind about some belief
Decided to behave in a different way in some set of situations
Optimized some part of a common routine or cached behavior
Consciously changed your emotions or affect with respect to something
Consciously pursued new valuable information about something that could make a big difference in your life
Learned something new about your beliefs, behavior, or life that surprised you
Tried doing any of the above and failed

Thanks to everyone who contributes! Happy New Year to folks; my resolution is to always post these on Monday evenings instead of letting them slip to Tuesday or Wednesday : >

Previous diary; archive of prior diaries.

Being well-diversified is a good goal here. The best way to do that is to invest in a portfolio of low-cost index funds. Target date funds are a great way to do this, because they automatically re-balance for you (caveat: some of them are expensive, although there are plenty of low-cost ones available).

If you're American, a good approach is to:

Invest as much as you can in your 401k and IRA. It's usually (but not always) best to max your 401k first, then Roth IRA if you qualify, and finally traditional IRA if you don't qualify for a Roth account. All of these accounts get massive tax breaks, so take full advantage.
For your 401k, see if there are low-cost (expense ratio < 0.20%) target date funds available. If there are, put everything into whichever one best matches your expected retirement date. If there aren't, look for whatever low-cost index funds are available. How much of each you should get depends on the specific funds, but basically you want to mimic the general allocation of a target date fund.
For your IRA, once again, a target date fund is generally a good idea. I don't know enough to say which is best, but Vanguard is probably a reasonable choice.
If you max these out and have additional money to invest, put it in SPY (an ETF that tracks the S&P500). It's certainly not a perfect solution, but it's reasonably diversified, low-cost and has the tax advantages of an ETF. I use Scottrade as my broker, and they're good enough that I don't find it worth seriously investigating alternatives.