If your broker or investment advisor is not familiar with the concept of standard deviation of returns, get a new one.

There are two kinds of investors, be thay large or small: those who don't know where the market is headed, and those who don't know that they don't know.

You have to ask yourself, what are the things that matter to you most in your life? If you have to have a latte every day that'snice to have right now, but if you take that latte every day right now, you may wind up eating cat food when you are 70. And you have to decide which is worse.

An index fund is a fund that simply invests in all of the stocks in a market. So, for example, an index fund might invest in every single stock or almost every single stock in the U.S. market, it might invest in every single stock abroad, or it might invest in all of the bonds that are out there. And you can make a perfectly fine investing portfolio that mixes equal parts of all three of those.

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.

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?

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