10 Rules for Successful Investing in 2010

Rule #10: All Investments Contain Risks — But They Don’t Contain the Same Risks

Despite all my talk about avoiding losses, the simple truth is this: If you want to grow your wealth, you have to take on risk. It’s unavoidable.
Every investment involves risk — the only questions are how much and under what circumstances. Remember, success is not about how much money you
can make, but about how much money you keep. As such, the true secret of wealth-building is taking risk properly.

The late legendary U.S. Army Gen. George S. Patton Jr., once said: “There is nothing wrong with taking risks.” But he also cautioned: “That’s quite
different from being rash.” I completely agree. I also think you have to take a certain amount of risk to be successful. Yet, most folks are unwilling
to do so — or they spread themselves too thin, and over-diversify, all with the goal of “protecting” themselves. Unfortunately, by doing so, these
investors actually set themselves up for failure — not because they take too much risk, but because they don’t concentrate the risks they do take
in the right places! What are those “right” spots? They’re the investments that can provide the potential rewards to justify the risks the investor
has taken.