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

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

The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.

A decade ago, I really did believe that the average investor could do it himself. I was wrong. I've come to the sad conclusion that only a tiny minority, at most one percent, are capable of pulling it off. Heck, if Helen Young Hayes, Robert Sanborn, Julian Robertson, and the nation's largest pension funds can't get it right, what chance does John Q. Investor have?

Bluntly put, there's no chance that your doctor, dentist, or attorney is a high-school dropout. Your stockbroker, however, just might be.

It's human nature to find patterns where there are none and to find skill where luck is a more likely explanation (particularly if you're the lucky manager).

The key thing about any fund is to make sure its expenses are low. You know, if you look at the funds in your plan and you see that they're all charging 1.5 and 2 percent,you've gota bad plan.