| I've ridden out bear markets calmly by investing in a variety of sectors and asset classes so something is always working. Even if stocks are way down, I have money in precious metals and fixed income, which takes some of the sting out of it. I also keep cash handy to put to work when stocks have fallen so I can take advantage of lower prices and make outsize returns. If most or all your money is invested in a small concentration of investments, you have fewer opportunities to hit a winner. In addition, there's a very strong chance you're going to miss a big move in one market because you were unable to deploy cash when prices fell. Additionally, you should never invest more than you can afford to lose, especially in a speculative investment. There's nothing wrong with taking a flier on a riskier trade if you can handle things going south. But you should never be in a position where, if things do go wrong, you'll be wiped out or suffer a loss that will be tough to come back from. Wealthy Retirement's publisher, The Oxford Club, recommends that no more than 4% of your portfolio be invested in any one position. And it oftentimes recommends a 25% trailing stop, which gives most stocks plenty of room to move and withstand market noise. So if you allocated 4% into a position and got stopped out with a 25% loss, your portfolio would be down only 1%. A 1% decline is not difficult to come back from. A 50% or 100% loss is. If your portfolio is too concentrated in just a few investments, get busy diversifying. The great thing about being an investor today is that with online brokers, trades are usually free or close to it. So it won't cost you to move money around into different assets. And if you haven't seen O Brother, Where Art Thou? - or even if you have - watch it this week. That will be the third-best recommendation in this column. Good investing, Marc | 
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