2 - Diversify, diversify, diversify. When you invest, stick to index funds. Don't overload on one company, one sector... I feel bad for all those employees who lost their life savings, because they were overloaded on Bear stock.
Your entire answer was a great explanation, Don Sicilia.
I feel bad on a personal level for the people who lost their life savings because of Bear Stearns. Yet the Michael Corleone business side of me does not feel bad. If you have all your financial eggs in one basket, there should be no surprise if something like this happens. Especially in the light of the post Enron, World Comm, Tyco, et. al scandals. With the way the banks have been in the news so much over the past year, I'm surprised another Bear Stearns had not already happened.
