This is very, very good advice, and is worth understanding in more detail. My favorite article on index funds is this one, which angles its discussion of index funds around the unusually good investment advice many Google employees received when they became millionaires after the IPO in 2004. My second-favorite is this one from Overcoming Bias (LessWrong's sister site).
Investing in index funds should be one of the big instrumental wins of rationality. It requires the ability to defend against overconfidence bias, the ability to defend against the wily marketing of financial advisers who don't have your best interests in mind, enough understanding of economics to comprehend what Yudkowsky called anti-inductive markets, and some not-especially-common knowledge about what investment options are available.
Perhaps you are still being insufficiently cynical. Yes, index funds outperform managed funds, and investment professionals get rich off their fees and their media, not because they personally know how to beat the market.
But if I am to believe the analyses poured out daily at zerohedge.com, volume in the US stock market is now dominated by a few large institutional investors, looking for a place to put the free money they get by frontrunning the Fed's purchases of Treasuries, and this is a political choice: US federal debt is being monetized, and the US d...
I am beginning to suspect that it is surprisingly common for intelligent, competent adults to somehow make it through the world for a few decades while missing some ordinary skill, like mailing a physical letter, folding a fitted sheet, depositing a check, or reading a bus schedule. Since these tasks are often presented atomically - or, worse, embedded implicitly into other instructions - and it is often possible to get around the need for them, this ignorance is not self-correcting. One can Google "how to deposit a check" and similar phrases, but the sorts of instructions that crop up are often misleading, rely on entangled and potentially similarly-deficient knowledge to be understandable, or are not so much instructions as they are tips and tricks and warnings for people who already know the basic procedure. Asking other people is more effective because they can respond to requests for clarification (and physically pointing at stuff is useful too), but embarrassing, since lacking these skills as an adult is stigmatized. (They are rarely even considered skills by people who have had them for a while.)
This seems like a bad situation. And - if I am correct and gaps like these are common - then it is something of a collective action problem to handle gap-filling without undue social drama. Supposedly, we're good at collective action problems, us rationalists, right? So I propose a thread for the purpose here, with the stipulation that all replies to gap announcements are to be constructive attempts at conveying the relevant procedural knowledge. No asking "how did you manage to be X years old without knowing that?" - if the gap-haver wishes to volunteer the information, that is fine, but asking is to be considered poor form.
(And yes, I have one. It's this: how in the world do people go about the supposedly atomic action of investing in the stock market? Here I am, sitting at my computer, and suppose I want a share of Apple - there isn't a button that says "Buy Our Stock" on their website. There goes my one idea. Where do I go and what do I do there?)