For anyone interested, I highly recommend David Swensen's book "Unconventional Success: A Fundamental Approach to Personal Investment." Swensen is the highly successful manager of Yale's endowment. While no book on investing is without flaws, I have found it to be some of the most understandable, well-argued and supported advice around.

Short answer: he recommends a portfolio of low-cost index funds/ETFs covering several asset classes and regular rebalancing to target allocation weights. I have generally followed his advice to good effect using Vanguard index funds.