1. Cash in the Backyard
   One should not think about keeping cash, with things the way they are, it's tempting to simply opt out altogether. Fear of financial-system failure, the uncertain nature of the stock market and just a sense of foreboding have people thinking that it's smarter to keep their money in the backyard, a mattress or an empty can. But it really isn't. The bank-insurance system works for holdings under $250,000. I know because my bank once failed, and the transfer of assets was seamless. So, at least keep your cash in certificates of deposit earning some sort of return. An overabundance of fear and caution can cost you money; don't let that happen to you.

2. Don't be Greedy
   Do not go after returns. This is a great temptation in any market, but especially so today. Bonds had a great run last year, but some analysts believe they may just be the next bubble waiting to burst. Look at it this way. In the past few years, the temptation to chase returns led people to buy too many houses, invest too heavily in a soaring stock market and aggressively bid up oil. All of it ended badly.

3. Don't Withdraw from Diversification
   There's a great desire now to stay safe by holding only cash or only Treasury's. This kind of behavior is really just the same as chasing performance. Be disciplined. Stick to a diversified strategy and rebalance your holdings every year to reduce your exposure to the high-fliers.

4. Don't Withdraw/Stop Saving for Retirement
   In times of turmoil, we tend to focus on what's right in front of us: the current bills, the savings account and what the day will bring. But we are all still going to want to retire at some point, so that means remaining disciplined about saving for retirement. Take a look at them and make sure that your holdings are diversified and balanced. Ignoring your savings -- or discontinuing them -- will come back to haunt you when you want to leave off working and relax on the beach.

5. Don't be Foolish and Ignore Common Sense
   Much heartbreak in the recent past has stemmed from an ignorance of common sense. Fraudsters promising overabundant returns snookered many investors. Some people viewed housing and the stock markets as never-can-lose gambits. Others spent far more than they had. Be prudent, save money, and invest wisely. Getting back to these very basics will help all of us rebuild our portfolios and set sail for a better day.

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