2b) Tax consequences matter. Take advantage of options to reduce them, for example by fully funding your IRA. Particularly for the young kids here, you should be maxing your IRA every year if you're debt free. (And you should not, not, not tap it when you change jobs, want to fund a startup or wedding, etc.)
Asset allocation matters. Investors who took the time to develop a plan, figure out an asset allocation that matches their risk tolerance, and actually rebalanced periodically to adjust their portfolio back to their allocation target, probably did just fine during the so-called lost decade.<p>Tax efficiency matters. A badly designed portfolio may lose 1% a year to taxes. Tax-inefficient investments should be held in tax-advantaged accounts (e.g. tax-free or tax-deferred accounts).<p>And it matters that you have the discipline to stick to your plan through all market conditions.
Here is a recent thread about index funds<p><a href="http://news.ycombinator.com/item?id=1949158" rel="nofollow">http://news.ycombinator.com/item?id=1949158</a><p>tl;dr Before IPO Google made several seminars so it's employees can get investment advice on how to invest their future millions. The advice was to invest in index funds.