No one in his right mind would walk into the cockpit of an airplane and try to fly it, or into an operating theater and open a belly. And yet they think nothing of managing their retirement assets. I've done all three, and I'm here to tell you that managing money is, in its most critical elements even more demanding than the first two.

When it comes to fund managers and market strategists, this year's hero usually turns into next year's zero.

While it is probably a poor idea to own actively managed funds in general, it is truly a terrible idea to own them in taxable accounts... taxes are a drag on performance of up to 4 percentage points each year... many index funds allow your capital gains to grow largely undisturbed until you sell... For the taxable investor, indexing means never having to say you're sorry.

Market risk is like taking a plunge into a cool pool ... a lot of people are finding out right now what their risk tolerance is.

The key aspect of an index fund is that many of them, not all of them, but many of them are extremely cheap.

The essence of effective portfolio construction is the use of a large number of poorly correlated assets.

You have to understand what market history looks like. What market history tells you is that the very, very best investments are made when things look the worst.