The intelligent investor, using common sense and without extraordinary financial acumen, can outperform the pros. In a world where financial markets are highly efficient, there is absolutely no reason that careful and disciplined novices — those who know the rudiments but lack the experience — cannot hold their own or even surpass the long-run returns earned by professional investors as a group. Successful investing involves doing just a few things right and avoiding serious mistakes.

Time dramatically enhances capital accumulation as the magic of compounding accelerates. At an annual return of +10%, the total value of the initial €10 000 investment is €108 000, at the end of 25 years, nearly a tenfold increase in value. Give yourself the benefit of all the time you can possibly afford.

Rather than trying to pick specific stocks or sectors of the market that may outperform in the future, we buy widely diversified all-world stock index funds that approximate the whole market. This guarantees we will receive the average return of all investors.

Being average sounds bad, but it is actually a great thing. That's because most investors perform worse than average after taking into account the high fees they pay for actively managed funds. Studies of fund managers indicate that there is no evidence of persistent outperformance. Funds that outperform one year tend to underperform in the next. That means more than 94% of actively managed funds underperform index funds over the long run.

Don’t ever buy an investment based on what it has done in the past. Every investment you are looking to buy comes with a prospectus that tells you more about the fund. And in each one, usually on one of the first pages, it states that past fund performance is no guarantee of future returns. No matter what you are investing in, eventually, the hot stock will one day not be the hot stock any longer.

Another way to look at this is the law of gravity. What goes up, must come down. Investments are the same. High-fliers will always come back down to earth. So don’t invest your money into stocks that you think will never come down because eventually, they will.

Do not let transitory changes in stock prices alter your investment program. There is a lot of noise in the daily volatility of the stock market, which too often is "a tale told by an idiot, full of sound and fury, signifying nothing." Stocks may remain overvalued, or undervalued, for years. Patience and consistency are valuable assets for the intelligent investor. The best rule: Stay the Course.

The best and lowest cost way to buy the whole stock market is with index funds (through ETFs). By purchasing a single all-world stock index fund, an investor owns a piece of essentially every public company in the world. This diversification lowers risk because the failure of any one company does not have a big effect. The investor is still exposed to the high volatility of the overall stock market, but in exchange, the investor gets to participate in whatever returns the market is generous enough to give over time.