If you don't want to get stuck with a loser, how do you invest?

It's more important than ever to do your homework. That means going beyond relying on a company's statements. Just a couple of days before Bear Stearns was rescued by JPMorgan, they swore their finances were fine. Meanwhile, plenty of people who follow Bear Stearns thought otherwise... and were making their suspicions known in blogs and the financial press. Not every rumor is true, but neither should you summarily dismiss them. Keep an open mind.

Stick with high-quality investments in sectors you trust. There's too much we still don't know about banks and their exposure to bad debt - so stay away. Big companies with solid track records, substantial overseas business, and low debt may not make you a bundle. But, these days, it pays to play it extra safe.