Investments are used to achieve long-term goals; savings are used for short-term goals.
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Diversification, with exposure to stock, bond and other markets, reduces risk.
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Investors should know how their investments fit into their portfolios and why they own particular assets.
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Investment cost minimization is crucial for long-term success.
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An investor's primary decisions involve choosing a mix of assets to be held in a portfolio, not the selection of individual investments.
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Outperforming the financial markets consistently is difficult.
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Risk is multi-dimensional. Investors should weigh "shortfall risk" - the possibility that a portfolio may not meet long-term financial goals - against "market risk," - the reality that returns may fluctuate.
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Market-timing and performance-chasing are not part of a winning strategy.
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An investor should not expect future long-term returns to be significantly higher or lower than long-term historical returns for various asset classes and subclasses.
