If you don't value leverage, you shouldn't be playing in the options market in the first place.

I'd go with just "The Repugnant Conclusion" for a band name.

Re #8, I actually prefer the rule of thumb of having (your age)% in a bond fund, and the balance in stocks. It's a nice transition towards conservatism with age. Also, this is what you should do with the money inside a 401k as well.

Index funds are available through a few million places these days - check your local bank, if it's big enough to have an investments arm.

As for the 401k bit, that's just tax avoidance(the single most important concept in finance). 401ks are tax shelters, where money can grow completely untaxed until withdrawal. I'm sure the UK has an equivalent - what's your national retirement account of choice?

Rebalancing is actually a good idea for two reasons. One, if you had a target asset allocation for a good reason in the first place, you want to keep to it. If you want 50/50 stocks/bonds, and your stocks double, then suddenly your portfolio is a lot more stock-heavy and volatile than you want. Two, it's a rules-based method of buying low and selling high. You're basically unloading things that have just done well and buying things that have just done poorly, which assuming some sort of regression to the mean means you're making a trading profit on net.

The average retail investor shouldn't rebalance more than perhaps twice a year, outside of extreme volatility. As you say, fees start to eat the rewards of the strategy if you do it too much. Personally, I rebalance with newly-invested funds - no trading fees, just use the new money to return to the strategic allocation. My investments are a high enough portion of my portfolio to make this easy, though, which may not be true of everybody.

But the cost of derivatives is generally so much lower that it's not really a big deal.

But we want to make money today into money tomorrow in the most efficient way that involves the least amount of worry. After all, we have specialised in some other area of human activity, and are not good at this area. So we should pick an investment that requires no upkeep, no worry, and good returns. This rules out real estate entirely, and the last criterion rules out letting money sit there.

This is pretty obviously wrong. Minimizing worry usually involves investments like T-bills or money market funds, which are notable for high security and rock-bottom returns. The trick is to make the reward/worry ratio worthwhile, not to take worry minimization as a goal in and of itself.

I'm all for index funds - my own portfolio is a collection of 4 index funds. But there's a place for investments in other things. I've seen several folks do the "Buy a house near my kid's university, have them do all the tenant-management crap, then either foist it off on a property manager or sell it afterwards" investment plan, for example, and it usually works well.

Yeah, I was using the non-adaptive brain as a baseline reducto ad absurdum. Obviously, it's possible to do better - the computing power wasted in the above design would be monumental, and the human brain is not such a model of efficiency that I don't think you can do better by throwing a few extra orders of magnitude at it. But it's something that even an AI skeptic should recognize as a possibility.

Oh, I have a terrible case of PN. I've been known to go back and read debates from years ago, just to remember the arguments I was in at the time. And I'm always terribly sad at the idea of something clever I do not getting an audience.

My video games have had AI for decades. Awful AI, but not really any more awful than a quantum computer that successfully factors the number 15.