Simple, powerful, obvious-in-retrospect concepts: in finance (and elsewhere) they're key to success. The fantasy of beating the stock market, in any meaningful way, is still fantasy. Sensible: diversifying so that, over the time horizon for an investment, return is maximized and risk minimized. "Modern Portfolio Theory" does that, with a bit of relatively straightforward mathematical modeling. Yes, models can be wrong — but they're explicit, they're testable, and in fact they're pretty good most of the time, especially over the decades. Handwavy "I'm smart (and rich, and handsome) arguments" aren't. *(see Black Swan Swindle)*

And the "Efficient Frontier"? That's the edge of a region on a graph, derived from Modern Portfolio Theory, where the blend of different investments cancel out as much short-term fluctuation in value as possible at a given level of long-term expected profit. Head for the Efficient Frontier; put more money into volatile high-return assets (e.g., stocks) when young, and shift toward less-volatile low-return choices (e.g., short-term bonds) as you age.

*(cf. MoneyWisdom (2001-05-20), ... )* - 2014-08-27