Historically, the stock market is like a gambling casino with the odds in your favor. Over the long pull, stocks are given something like nine and a half to ten percent compounded per year. The banks have probably given you something in the order of four to five.

The surest way to find an actively managed fund that will have top-quartile returns is to look for a fund that has bottom-quartile expenses.

Index funds have regularly produced rates of return exceeding those of active managers by close to 2 percentage points. Active management as a whole cannot achieve gross returns exceeding the market as a while and therefore they must, on average, underperform the indexes by the amount of these expense and transaction costs disadvantages.

Index funds do not trade from security to security and, thus, they tend to avoid capital gains taxes.

Never buy anything from someone who is out of breath.

Many of us economists who believe in efficiency do so because we view markets as amazingly successful devices for reflecting new information rapidly and, for the most part, accurately.

We conclude that hedge funds are far riskier and provide much lower returns than commonly supposed.