Wall Street has sure had a rough go of it. Lehman Brothers, a 158-year-old securities firm, is suddenly bankrupt.

Just a week prior, it was Fannie Mae (FNM) and Freddie Mac (FRE) that needed a government handout. Merrill Lynch has been bought out, and American International Group (AIG) is now a ward of the state, and Citigroup and WaMu could very well be next (see, "Lehman and Wamu in Death Pact").

If you feel like someone dumped a bucket of cold water on your head, you're not alone. But instead of deconstructing the last 14-months of this tsunami-scale credit crisis, I'm here to tell you that this, too, shall pass.

It's time to clean up the debris and get on with our lives. Wall Street will survive–with or without Lehman Brothers (LEH). That's the way the free market works!

See, many people forget that old phrase "risk vs. reward." If you invested in the stock market with the expectations of steady positive returns, perhaps you're confusing Wall Street with low-yield bonds!

The reasons stocks can generate 10%, 20% or even 50% returns in just a few weeks is because investors are taking on a big risk. And those risks are not without consequences.

So I'm not going to bother giving you advice on how you can prevent losses; that would be futile. But what I will do, is tell you how to invest so you can reduce your risk and increase your rewards, so that over the long term you will see a healthy portfolio that delivers results that beat the market 3-to-1 or more!

Three Easy Steps to Beat the Market

1. Don't put all your eggs in one basket. It's a very risky proposition to rely on only one or two stocks, or only one or two sectors. Diversify to make sure you limit losses, and to ensure you get in on a wider range of profits when the market rebounds.

2. Steer clear of financial firms for now. They are too volatile–meaning the risk is NOT worth the reward (see also, "Will Goldman Sachs Be Next?"). Sure, some stocks may be a bargain and skyrocket in the coming months. But others...