On balance, the financial system subracts value from society

The historical data support one conclusion with unusual force: To invest with success, you must be a long-term investor.

Successful investing is about owning businesses and reaping the huge rewards provided by the dividends and earnings growth of our nation's - and, for that matter, the world's - corporations.

The miracle of compounding returns has been overwhelmed by the tyranny of compounding costs.

We need to reorganize our entire system of retirement plan investing and to develop federal standards of fiduciary duty for pension trustees and fund managers. These require "top down" intervention. But we also need investors to look after their own economic interests, a bottom up approach to our problems that is well within our individual power to undertake.

If the data do not prove that indexing wins, well, the data are wrong.

It's very difficult for any particular segment of the stock market to sustain superior performance. The watch word for our financial markets is, "reversion to the mean" i.e. what goes up must come down, and it's true more often than you can imagine.