I have TIAA-CREF. That's better, maybe?

Anyway, I diversified this summer because I'm old.

2: just another kuck cowtowing to kritical race theory.

The advice we received was to diversify index funds and rebalance regularly so that you can get out some at the highs and pick up some that are at lows. There's tax costs to rebalancing if you have any significant amount not in retirement accounts. I think we have a mix across about 10 index funds (international vs domestic, different sectors or company sizes, some real estate funds.)
I took money out right before the election and put it back it over a couple months after the inauguration. I missed about 10% of gain which looks bad in hindsight but of course if the coup had been successful probably would have been a good strategy.

I worry because Alzheimer's is inheritable and I know it was a huge relief that my parents put away enough money to pay for that kind of care for years.

I sold all my Tesla stock when Elon Musk started hanging out with Trump. I feel righteous but there are many fewer dollars in my pocket.

IIRC, the problem with that kind of structured product where you get X per cent of the return on some index with a guarantee that it won't be less than Y is that, seeing as the index is likely to go up, why would someone take the other side of the bet and insure you against the downside below Y?

Well, because you're paying them over the odds to do that.

I remember seeing some study somewhere that the best investment results across some group of people investing for retirement were achieved by the investors who lost their login info and were unable to do anything but leave the account alone. I just did that for five years -- an old IRA I had in an index fund was really unreasonably difficult to change my name on after I got divorced, and because I am a mature and mentally healthy person I got sulky and didn't interact with it at all since 2016. I just finally got the name change done and looked at the returns, and it's worked great.

7: Isn't that just the nature of insurance? If it was worth the money, in terms of straightforward expected value, no one would sell it. Both with ordinary insurance and with that kind of investment process, you're trading lower expected returns for protection against risk.

Harold Pollack, who is somehow both a University of Chicago economist and a non-asshole, has (somewhat famously) put it all on an index card.

I used to play around with individual stocks for fun, and did not do particularly well. I have, objectively speaking, held too much cash because for the last 20 years I have been fearful of the collapse of either my career or civilization. My career is actually more stable now than it has been for a long time, but civilization ain't looking too good. So I'm still more risk-averse than is appropriate, and the market looks expensive to me. (But don't try to time the market!)

And if you haven't sold your Gamestop stock, do it now.

The card is great but it presumes a certain type of job.

Index funds with intermittent rebalancing agreed. As 4) mentions, diversification outside the US is good to include. IMO also reits, those are good diversification from the crazily priced software companies. Avoid malls though.

r>g as Piketty writes.

The index card is better than I remembered -- the only thing I'd do with it is reorder it a little to move credit cards and social insurance up to the top.

But for how much of the population is the card a real possibility?

Right, a lot of it relies on a starting point of "don't be poor."

I have most of my 403 (b) in one of those Vanguard Target funds, because the fund choices and fess through Fidelity stink. MIT got sued for allegedly being negligent in negotiating fees with Fidelity. Claim was they failed as a fiduciary of an ERISA plan. I don't know if it went anywhere. Maybe Abby Johnson was on their board?

I got hired about 3 months before they dropped the cash balance plan, so that is pretty secure. I should look at the international funds, but maybe I should do that with my Vanguard Roth IRA that I haven't contributed to for a while, because we were filing separately until I got rid of student loans.

The fees on my 403(b) are outrageous compared to Tim's. And we are a frickin "non-profit." Health insurance through us is getting more expensive compared to other, less fancy health systems, and lower wage employees are paid less. I don't think that the prestige of the institution matters when the choice is between $14/hr (less than McDonalds) and $18 with insurance that has lower cost sharing.

I went to a thing on women and money once. First advice was max out your 401 k in your 20's even if your parents have to help you out. Also, if you start at McKinsey, I vets in whatever the smart Senior Partners are investing in.

Clearly a winning formula for everyone.

I would also move credit cards further up; not paying gazillion-percent interest is an excellent return on investment.

"Max 401k" is fine advice if you can swing it; "maximize the company match, if any" is an important and often more easily achieved goal (free money, usually even if you end up pulling the money out of the 401k later and paying a penalty. We have a remarkably generous match at work (100% of the first... $3000 or 50% of the total contribution, whichever is greater), so anyone who can do the cash flow juggling can increase their pre-tax pay $7000/year at least.)

I had 150% match at my longest time employer, up to 8% (so they put in 12%).

Max 401k if there's a match, otherwise first max Roth IRAs while you're in a lower tax bracket. Or use a Roth 401k if it's offered.

18: Totally agree.

Our match was minuscule so pare to Tim's like maybe they match 2-3%. I don't get any matching, because I have the cash balance plan which is really quite good. Having dropped that in 2016, the benefits of staying long term for employees hired after that date if salary and health insurance don't keep up is less than it used to be.

I have maintained 75% stock index funds and 25% bond index funds (or the closest my 401k offers) and according to the portal site that manages it, I've gained $110k over my and my employer's contributions since their data starts in early 2016.

I am proud of my mom for having worked this out for herself in the seventies and eighties. She came to the US as an adult, anything technological is not her friend, but she worked out how to save effectively from free seminars and regular-person finance magazines.

We didn't even have technology in the 70s.

14: Well, that's why I'd move the two lines that are of more universal applicability up to the top. Someone who isn't in a position to take advantage of the rest of the advice doesn't need investment advice, they need social insurance.

I think "social insurance" implies they can, over the course of a lifetime, make a payment sufficient to offset what they would be expected to get paid out. That's not the case for a significant chunk of the workers.

And if you haven't sold your Gamestop stock, do it now.

I did marvelously well with it, but sold it months ago. Bought at ~150, sold at ~215 I think. I kept one single stock out of curiosity. It's at 181ish, I think.

And you all should read: I sold when you all told me to. It was great.

You could call it social welfare, but I think social insurance gets used for programs that don't balance out at the level of the average individual.

26: To me, it implies cross-subsidization from more to less fortunate, not just saving your own money and giving it back to you. After all, when GWB tried to make it more like the latter, it went down in flames.

I don't really think of asking you all for advice as social welfare, but point taken.

I thought it was a U of C economist being sneaky but Wikipedia agrees with 29 and 30.

I wish Obama had been able to get the fiduciary standard for financial advisors to stick; it'd be nice for that to be the baseline, instead of something that individuals are supposed to get their advisors to commit to.

I began my career working for small companies that didn't have a match structure; eventually they added a SEP Ira when they figured that out. I did LB's buy and hold and it worked fine. I was irrationally risk adverse and used bank CDs for much of my saving in my 20s, before I realized that the 2% wasn't worth the hassle.

Backstopping a business, particularly when getting established and financing a relocation, has pushed me to keep a lot more liquid than my previous norm. I still contribute to my 401(k) at the withholding rate, but have never been offered a match. I spoke with my financial advisor earlier this year; he had good advice to make sure that my wife socks away as much as possible this year -- she skipped last year because the business wasn't going well (in addition to skipping some paychecks... it was really not good for a while).

I don't have the exact basis tracked but I think since I started working 18 years ago my 401k balance is about triple the amount of money that's been put in. It's been basically 100% stocks. That's the one thing I didn't touch during the election.

LizardBreath: I think you're accurately reflecting the consensus definition. "insurance" is based on the idea that the individual (or group) contracting with the insurer is likely pay in [at least] as much as they take out over their lifetime. "social insurance" is based on the idea that society will do that as a whole. I mentioned "group" b/c nobody pretends that "group insurance" (like employees of a firm) has the property that each individual will take out no more than they put in: it's a benefit for the entire group and the group's sponsor. And so the same is true of society.

9: you are, but the terms of the trade are significantly worse than they are for straight insurance. the return you're giving up could be really high - your stocks could moon - while the risk you get rid of is bounded because the worst thing that could happen is going to zero. writing insurance on something that doesn't happen a lot in exchange for taking the best of your investments is clearly good business!

Right, I was quibbling rather than really disagreeing about that kind of financial product, which I'd expect as you say to generally not be worth it.

Something that this pitch misses is that middle class people who are indexing are also not buying all their shares in the index fund at once, but instead buying a fixed amount every month. This effectively diversifies the portfolio over entry points, so that even if you lose some capital one month when the market turns down, this is ameliorated somewhat by purchasing some new stocks at what could be a market low.

Dollar cost averaging! Yes- easy to do in defined contribution plans like 401k, hard to do in personally managed accounts like IRAs (not technically hard, but to have the discipline to not try to time the market.)
I have wondered, which means it's probably happening, if some hedge fund is skimming profit because every payday (typically Fridays or last of the month) there's a defined amount of money entering the market for regular retirement account purchases.
The stupidest job in the world is writing financial market headlines. This morning the market was shrugging off inflation worries- now it's dropping on high inflation but the price of oil is also dropping on inflation fears.

Trivers!

"Commodity prices are steady on reports that my new briefs really support my balls."

IIRC, the problem with that kind of structured product where you get X per cent of the return on some index with a guarantee that it won't be less than Y is that, seeing as the index is likely to go up, why would someone take the other side of the bet and insure you against the downside below Y?

Two other main problems:

1) Is the product actually doing what it says it's doing, or is it doing something cheaper that performs similarly in most circumstances, but then blows up when correlations go screwy?

2) You're taking counterparty risk, so you're screwed if a Lehman Brothers happens.

Two comments about the reference to Pollock, the index card guy, way upthread:
1) He is just an out-and-out mensch, one of the best people I've ever encountered. One of those people whose existence gives me faith in humanity, in the same way that Trump's existence drains that faith.
2) It is stretching things a bit to call him a U Chicago economist. His phd is in public policy, and his appointment in in the school of social service administration.
The connection between those two comments is left as an exercise for the reader.

43: Thanks for the correction of my egregious, unwarranted slander. When I was looking for the index card, I believe I saw him identified as an economist.

In other news, there may have been a better way to identify a book for a book club than "the autobiography of an Austrian artist."

For real? Do you have proof??

I mean, proof that this occurred. I'm willing to take it on faith that there's a potentially better way.

I made it up for a stupid joke and I'll do it again on the slightest pretext.

I just learned that if you put "(Taylor's Version)" next to something it means that Taylor Swift owns it. So don't add that to your mortgage or IRA or whatever if you want to keep it.

Koch Industries (Taylor's Version).

Mar-a-Lago (Taylor's Version).

Also, for reasons I'm not quite clear about, fuck Jake Gyllenhaal. I guess.