Having accepted a speaking engagement at a university school of business recently, I had to think about what introductory information I could impart to the students about investing that would be practical, immediately useful and establish a foundation for whatever direction their paths might lead. This was supposed to be the first in a series. However, since I pull no punches and can be a little edgy in my candor and presentation, who knew if I would be invited back?

My outline had five basic elements. The first thing I told them was to start now!

A new year is upon us and like the beginnings of any year, and even more so, a decade, the predictions are flying fast and furious.

The start of 2010 is bringing out every analyst, talking head, business journalist, periodical and newsletter propagator, sportscaster, palm reader, taro card interpreter, astrologist, medium and madam making predictions to garner attention, entertain and even profit. Apologies to anyone I left out.

For those of you who haven't read Burton Malkiel's Random Walk Down Wall Street, the ninth edition will be coming out on January 22nd. The Princeton professor's book was hugely controversial (among the few of us who actually care about this stuff) when it debuted 34 years ago, and much of Malkiel's wisdom is still far from widely accepted today. Among the core tenets of his philosophy:

• Low-cost index funds are better than actively managed mutual funds.
• Technical analysis is often not accurate. Active trading will too often result in losses.
• Fundamental analysis isn't a whole lot better.

The book is important to read because, regardless of whether you agree with these ideas entirely (I don't necessarily), they are MOSTLY true. Most stocks are fairly priced, most active traders lose money, and there's a strong case to be made for not trying to pick money managers. If Malkiel is wrong, it's because occasionally, markets are inefficient. But to exploit those inefficiencies, I think investors need to understand the concept of efficient markets. Sadly, I think most retail investors don't.

And what if Malkiel is right? If markets are efficient, should we give up the practice of trying to pick stocks? Even Malkiel wouldn't go that far. In an interview on Wall $treet Week a few years ago, he was asked what he meant when he said that "investing is sort of like making love." Malkiel answered: "...Even if you admit to yourself that you can't do it any better than the next guy, you sure don't want to give it up."