For the average person, this is very good advice. It is VERY difficult to beat the market on a consistent basis (look at the track record of mutual funds compared to the s & p over 10-15 year periods, and these guys are proffesionals) without a fundamental knowledge of investing and a willingness to put in the man hours searching through stocks.

Index funds do three things:
1. Instant diversification
2. Gives you a consistent track record of 11% to look for in the future
3. Prevents you from eating up brokerage costs from trading

However, in recent years it has been estimated that the returns for index funds will not be as high as in past years due to the millions of people who have followed this advice and put all their retirement funds into index funds.

Props on picking up the intelligent investor, one of the greatest texts available for finding a consistent way to beat the market (value investing is THE best system). The key to investing, and it can't be overemphasized, is RESEARCH RESEARCH RESEARCH, HOLD HOLD HOLD, keep RESEARCHING, and keep pushing in funds. Dollar cost averaging is a very smart idea when investing in anything to do with the stock market.

One caution, Graham puts a large emphasis on book value, but in recent years the calculation of book value has changed at the corporate level and even buffet admits that it is not as important as it once was. It still applies to a few sectors (namely financial, insurance, just to name a few), but in general, downplay slightly the importance of book value to price.