The Basics of Financial Independence: Total portfolio

4. Invest in a low-cost, tax-efficient, diversified, balanced index portfolio.

• You should view your portfolio in the TOTAL sense and not try to replicate your desired portfolio in each account. That is, you should pool ALL your assets (401K, IRA, Brokerage, etc) and view it as one TOTAL PORTFOLIO. This way you will best optimize for tax-eficiency, low-cost, and diversification. 
• Start with LOW-COST. Aim for all funds in your portfolio to have an expense ratio of below .20% ($20 for every $10,000 invested per year). As we now know, since it has been beaten into our heads, costs are VERY IMPORTANT and they COMPOUND.
• Your portfolio should be tax efficient. Ideally, you should have some tax-advantaged accounts such as a 401K (or equivalent such as 403b), a IRA (Traditional or Roth), 529, and/or an HSA. You should also have an account that is not tax-advantaged such as a brokerage account. Assets that are NOT tax-efficient such as bonds, REITs or ones that pay out unqualified dividends should be placed into your tax-advantaged accounts (401K, IRA, etc). Assets that are tax efficient such as the Total US Stock Market (S&P 500) should be held in your brokerage account.
• Your portfolio should be broadly diversified. That is your total portfolio should contain asset classes that do NOT correlate closely. For most individuals this can be solved by owning some US assets (Total US, S&P 500, etc), some International (Total Int'l, Developed Int'l, etc) and some fixed income (Total Bond, TIPs, etc).
• Your portfolio should be balanced based on YOUR own risk profile and YOUR own timeline. It should also be rebalanced when any asset class becomes more than 20% outside of its desired allocation. For MY personal portfolio (based on MY own risk profile AND MY own timeline) I am using 25% Total Bond, 25% Total US, 20% Total Int'l, 10% Emerging Markets, 10% Small Cap Blend, and 10% REITs. (And because I am keeping it tax-efficient the bonds and REITs are held in tax-advantaged accounts.) If any of my allocations become 20%+ more/less than its desired allocation I then take action to bring my portfolio back to my desired target allocation.