Devoted to understanding the basics and fundamentals of investing

One of my favorite authors from The Wall Street Journal, Jonathan Clements, has written another winner.  On 10 September 2006 in his column "Getting Going" he wrote an article titled "Sometimes the Magic Can Just Fade Away."  He lists seven pieces of market magic that investors believe in that maybe they shouldn't.  My summary follows below:

1. You can't go wrong with American Funds.  Jon's a fan but worries that when funds get too big the returns fall by the wayside.  American Funds doesn't see that in the tea leaves yet.
2. Home Improvements are a great investment.  A 2005 survey shows that after just one year home improvements return only 87% of the money spent.
3. Stick with five-star funds.  Two points: Past performance is a poor predictor of future performance.  Morningstar says the stars are, "a useful tool for identifying funds worthy of further research, but shouldn't be considered buy or sell signals."  5 stars is a starting point, not the end.
4. Value stocks win in the long run.  Historically this has been true.  But after an almost seven year run of out performance is this the time to commit new money?
5. The smart money is in ETFs.  They may have some small advantages.  If you trade a lot you may lose the advantages that do exist.  They are best for very long term holding in large blocks.
6. Stocks earn 10% a year.  Again historically true but the conditions that led to that return may not exist now or into the future.  Dividend yields are down and historical PE expansion would be hard to duplicate.
7. Rental real estate is the safe way to go.  It is high risk, high volatility, ill liquid, not diversified, and you have tenants, maintenance and repairs to worry about.  You might be better off in no-load mutual funds with much less stress.

Sounds like good advice to me.  What do you think?