I posted this previously to the Vanguard Diehards/Bogleheads forum, and it was presumably well received because a lot of people refer to it and quote it!

There are only a few things that you really need to know about investment.  There are some things that are nice to know, some things that are bad to know (i.e. things which are simply false, or at best easily and commonly misapplied) and some things that are really essential.  

The following is a framework you can apply to assess all investment claims you come across.

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What You Need to Know About Investing

There are a lot of things that are nice to know about investing, things which could potentially lead to higher returns if you are skilled and disciplined. (Like how to value and select stocks to beat the market like Buffett does.)

But you don't actually need to know about things like that. In fact for most people its better if they don't know because a little knowledge can be a dangerous thing and stick picking is quite difficult.

What you need to know is this:

• That the average investor achieves the same return as the market before costs. The market has a return basically the same as a good low cost index fund.
• That after costs the average investor manages to substantially underperform an index fund because if not strictly controlled costs can quickly mount up.
• That only a minority of investors can beat index funds after costs. Whether you think the market is efficient or not is beside the point, only a minority of investors can beat the market and if you achieve the same return as the market you will actually do better than the average investor.
• That many of the costs of active investing, like capital gains tax, active fund MERs and market impact costs, wipe out the excess returns earned by skilled active investing for most investors and it is very hard to avoid these costs while pursuing any kind of "active" investing strategy.
• That historically higher returns have been enjoyed by investors in low priced ("value") stocks and small companies and that low cost passive funds are available which have expected returns even higher than those experienced by traditional indexers, who themselves are above average, hence investors following these strategies have experienced returns equal to those of only a tiny minority of the best active investors.
• Passive approaches, including the value and small cap ones require no skill or study to apply and work best for people who are lazy and indifferent to their investment portfolio and thus can just leave the darn thing alone.
• That by spreading out investments across various asset classes a great deal of risk can be averaged away while not hurting long term expected returns.
• That attempts to find a working method of market timing have confounded the best investing minds.
• That the media knows nothing which isn't already known to the market.

That's all you need to know. If you never read another thing about investing but remember the above when making an investment decision you'll do better than the vast majority of other investors - guaranteed.