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The portfolios that beat 99% of all portfolios for 2008 really are unique. Their proponent does not have clue about market timing, stock picking or manager picking. They are available without using any broker or advisor;

They involve the purchase of three low cost index funds.

A recent study found these simple portfolios beat the passive portfolios of Scott Burns, David Swenson, William Bernstein, Ben Stein and Andrew Tobias. I am quite confident that they beat 99% of actively managed portfolios of comparable risk as well.

Here are the 2008 returns and risk for these portfolios:

Isn't it finally time to put someone in charge of the SEC who really cares about investors?

There are many well qualified candidates. Here are a few suggestions:

William Galvin: The highly respected Secretary of the Commonwealth of Massachusetts. He has taken on the industry and recovered millions of dollars of damages for aggrieved investors.

Joe Borg: Executive Director of the Alabama Securities Commission. Mr. Borg has a stellar record of protecting the interests of investors in Alabama.

Andrew Cuomo: The Attorney General of New York. He knows the industry and has shown great tenacity in exposing the recent fraud involving Auction Rate Bonds and other misdeeds.

Mary Schapiro, who is President-elect Obama's choice, has spent her career protecting the securities industry from investors.

Christopher Cox, the chairman of the Securities and Exchange Commission blames career administrators at the SEC for their failure to investigate Bernie Madoff.

We now know the SEC received "credible and specific allegations" of wrongdoing by Madoff over the past decade and ignored them. More troubling is the news that an SEC attorney who participated in investigations into Madoff's firm in 1999 and 2004 recently married Madoff's niece.

Industry insiders do not believe the SEC was really "asleep at the switch." The SEC is a toothless tiger that more often than not protects the interests of the industry it is supposed to regulate. Commissioner Cox has carried out that mandate more brazenly than any other Commissioner in recent memory.

Here's one of many examples:

In May, 2004, Senators Patrick Leahy (Chairman of the Senate Judiciary Committee) and Russell D. Feingold, a member of the Senate Judiciary Committee, wrote to Commissioner Cox. They asked him to give investors a choice between the mandatory arbitration system imposed on all investors who have disputes with their brokers and going to Court.

It won't take long for a flurry of lawsuits to be filed over the massive losses caused by the Madoff Ponzi scheme. Filing complaints is easy. Recovery is far more difficult.

There is no doubt that investors who entrusted Madoff with their life savings should be entitled to get them back. I only wish it were that open and shut.

There is a lot we don't yet know, but here's the way it looks to me at present.

Investors who relied on hedge funds ("funds of funds") may have a shot a recovery. These funds represented that they had the ability to select and monitor fund managers. Their recommendation of Madoff to their clients will be difficult to defend given the numerous red flags that have surfaced about his secretive and conflicted operation.

Investors who relied on other referral sources (brokerage firms, accountants, lawyers, advisors) stand on similar footing. These sources of referral may well have liability for not doing more due diligence before recommending Madoff's firm.

I don't mean to pile on. I know looking at your 401(k) statement is so painful these days many employees don't bother to open it.

History tells us that markets recover over time. Your 401(k) will increase in value, but it will still be far short of what you will need to retire. Why?

Because of hidden costs that enrich 401(k) providers. These costs are totally unnecessary and could be easily eliminated if only your employer cared enough to do the right thing. Most don't.

There is no end of research indicating that index funds outperform funds that try to "beat the markets." I call these funds "hyperactively managed funds." Index funds are also far less expensive.

While "less expensive" is good for employees, it is bad for brokers and advisors to these plans because it deprives them of excessive fees. The porky pig fees in most 401(k) plans include undisclosed trading costs, the payment of excessive brokerage commissions, the practice of subsidizing record-keeping services with high fund management fees and the payment of marketing fees for selling the high-cost funds in the plan, among many others.

I advise people how to invest in the stock market. My books empower people to take charge of their investing: determine their asset allocation, buy a globally diversified portfolio of low cost index funds, and avoid brokers.

Frankly, it's a tough sell. Investors want the risk of risk-free investments, but the returns that come with taking significant risks. Most brokers and the financial media are more than eager to help them try to do so.

As Dr. Phil would say: How is this working for you?

It's not just about the current market meltdown. There is ample data indicating that, over the long term, the average equity investor makes a significantly lower return than he or she could obtain from FDIC insured Certificates of Deposit or Treasury Bills, with far less risk. This is a fairly predictable result, caused by stock picking, manager picking and market timing, all of which are peddled to gullible investors.

Historically, stock market investing has been the only way to keep pace with inflation and taxes. Nevertheless, it really is a lazy way to make money. You write a check, deposit it in an account and hope that it will grow into a bigger check so you can take it out some day and retire.

This post is part of a series where personal finance expert Dan Solin looks at money secrets that help the rich stay rich. See them all.

To be a successful investor, you need to know the odds.

Investing is far more important than gambling. Yet most gamblers understand the odds before they place a bet. Few investors understand the odds of achieving a return on their investments.

The odds of shooting snake eyes at a craps table are one in thirty-six.

The odds of winning on one number at a roulette table are one in thirty-eight.

Most investors buy actively managed funds, where the fund manager attempts to beat a given benchmark. What are the odds she will be able to do so?

They are one in thirty-six. Sound familiar?

Almost every broker and many advisors will tell you they can pick stocks that will be winners. What are the odds they can deliver?

This post is part of a series where personal finance expert Dan Solin looks at money secrets that help the rich stay rich. See more.

Most investors don't realize that the biggest factor in reducing their returns are the costs associated with their investments.

These costs include commissions, loads, taxes, advisory fees, market-makers, transfer agents and related costs. When you add them up, they can be very significant, reducing overall returns by as much as 40%!

Actively managed mutual funds (funds that try to outperform a given benchmark) have high turnovers of their portfolios. High turnover generates taxable transactions. The tax hit is carried by the investors in the fund, even when they don't sell their shares.

Here is one example:

The actively managed Fidelity Contrafund had a turnover of 60% in 2006. The passive Vanguard 500 Index Fund had a turnover of 7% during the same year.

This post is part of a series where personal finance expert Dan Solin looks at money secrets that help the rich stay rich. See more.

There seems to be no end of brokers, advisors, and talking heads on television who give advice to guileless investors. They discuss where the markets are headed, what stocks to buy "now," what stocks to sell, and which fund managers are "hot."

They endlessly analyze economic data and interpret it for those of us too unschooled to understand it. They tell us how it affects the markets, and what steps we can take to profit from this knowledge and from their insights.

Often they provide this information in breathless reports delivered from the floor of the New York Stock Exchange, which serves to heighten the urgency and importance of their message.

For the most part, they are false prophets. The information they impart is irrelevant to a sound investment strategy. In fact, listening to it and relying on it is harmful to your financial well-being.

Here are some examples:

This post is part of a series where personal finance expert Dan Solin looks at money secrets that help the rich stay rich. See more.

It always seemed to me that most people who said that money can't buy happiness didn't have much money.

It would be more accurate to say that if your unhappiness has nothing to do with money, wealth won't make you happy.

The harsh reality is that most of us need a certain amount of money to pay the bills and hopefully provide for retirement with dignity.

Investors who follow the basic lessons that rich people know will be taking a positive step in the direction of responsible, intelligent investing that will help them maximize their returns.

Really rich people understand that money can't buy health. It also can't buy meaningful relationships with family or friends.

This post is part of a series where personal finance expert Dan Solin looks at money secrets that help the rich stay rich. See more.

Rich people own both appreciating and depreciating assets. They know the difference.

Depreciating assets decline in value.

Appreciating assets increase in value.

It is the appreciating assets that permit rich people to purchase the depreciating assets, and not the other way around.

Rich people get rich by buying assets that increase in value slowly over time. They build up businesses. The buy and hold real estate.

They invest in the stock market differently than most individual investors. They determine their asset allocation and buy and hold a globally diversified portfolio of low-cost stock and bond index funds.

This post is part of a series where personal finance expert Dan Solin looks at money secrets that help the rich stay rich. See more.

Is this a good time to buy commodities?

What about emerging markets?

Don't value stocks outperform the markets?

Six months ago, the investment du jour was oil. Clearly, it had no where to go but up. Right?

China and India were increasing consumption at a rapid rate and oil was in short supply. Many analysts were projecting the date when oil supplies would run out altogether.

Six months later, oil tanked.

Did you think that gold was a good hedge against a financial meltdown? If so, your views were shared by many "experts."

Gold reached a record high price of $850 in January 1980. Its current price is $747. What happened?

This post is part of a series where personal finance expert Dan Solin looks at money secrets that help the rich stay rich. See the first five secrets.

I give a lot of talks to groups of investors. I like to ask this question:

How many of you made most of your money investing in the stock market?

Very few hands go up.

I get the same result when I ask: How many of you know someone who made most of his or her money investing in the stock market?

Let's drop to the bottom line:

Rich people invest in themselves.

Poor people invest in "things" that give them instant gratification, like plasma screen TVs and flashy cars.

I don't mean to be glib. Rich people can afford education and great health care. Poor people often can't. A great education and good health positions rich people to get richer.

This post is part of a series where personal finance expert Dan Solin looks at money secrets that help the rich stay rich. See them all.

The headline needs a caveat: some rich people did invest in complex instruments they didn't understand.

They are no longer rich.

Hedge funds are a perfect example.

Few people really understand them. They are not regulated. It is difficult to figure out what they are investing in. It is even more difficult to determine if they have deviated from their original investment strategy.

They promise big returns without additional risk.

Many investors and even pension funds fell for the pitch.

Few took the time to look at the data.

One study of 1,917 funds found that only 17.7% beat their benchmark.

Hedge funds are imploding at an alarming rate. One site that tracks hedge fund failures reports that, since mid-2007, 95 funds managed by 58 firms have blown up.

This post is part of a series where personal finance expert Dan Solin looks at money secrets that help the rich stay rich. See them all.

All information about listed companies is public. It is widely and instantly disseminated. This information is studied by millions of investors, who establish the price of a given stock based on this data.

Many of those looking at this data are professional analysts. They are well trained in finance and have access to powerful computer programs that assist them in crunching the numbers.

There is one piece of information they don't know: tomorrow's news.

Future events move stock prices. The market has already discounted for current news.

Because no one knows tomorrow's news, many "sure bets" turn out to be losers. Fannie Mae, Lehman, and Bear Stearns are recent examples. Past failures of top-rated stocks include Worldcom, Enron, Bethlehem Steel and Polaroid. In fact, of the 500 companies that made up the S&P 500 in 1957, only 74 of them were in the index in 1997.

Here is the real kicker: Only twelve of those companies outperformed the S&P 500 index in the period from 1957-1998.