As we talked, it was becoming apparent that anything less safe than a guaranteed CD was going to be an unnerving proposition.
That can be a recipe for disaster if an investor is not careful.
One of the biggest mistakes investors make is miscalculating how much risk we're really willing to take on.
These are trying times in the market right now. The wild swings present great opportunities, but they are not for the faint of heart.
When people first ask me about dipping into stocks, especially those that carry higher risk-reward, I ask this question: "If you had an investment that dropped 20 percent in one day, or even one week, how badly would you freak out?"
If you envision a manic episode, you're probably not ready to wade too far out into the market, and certainly not on your own.
You can still make money in stocks, but you're probably best off sticking with mutual funds, exchange-traded funds and truly stalwart stocks like Proctor & Gamble and Altria. (So long as you're not averse to investing in cigarettes.)
But even if you think you're a risk-taker, you might not be. Imaginary losses are a whole lot easier to stomach than real ones. And most of us learn out risk tolerance the hard way.
But do we have to lose a good chunk of money to find out? Maybe so, at least definitively.
But fortunately, there are some resources out there to help us form a solid foundation for our decisions and avoiding pitfalls.
Here are three I found useful:
Try them out. See where you stand.
I scored a 34 on the Rutgers quiz. Kiplinger's says I should put every penny into stocks.
But Bankrate indicates I have only a "moderate" risk tolerance.
My portfolio down 7.3% on year. See it here.