• Don't overload on hot investments. By the time the average individual notices that a particular investment has become hot, it's often too late to take advantage of that knowledge. Many individuals invested in technology stocks just as they were peaking. Scared by stocks, many then started investing in homes and real estate. Instead of focusing on one hot area, make sure your investments are diversified among a variety of investments that you are comfortable holding.

• Gains do not equal savings. As stock and housing values went up in value, it caused a phenomenon called the "wealth effect." Because the increases in value made people feel wealthier, they felt less need for saving and more comfortable spending. While that fueled the economy for several years, it also meant that many individuals cut back on saving for retirement.

• Excessive debt just makes things worse. Whether it's a margin loan used to purchase stocks or a mortgage used to purchase a home, the dangers of too much debt become readily apparent once the value of the assets underlying those loans decreases. For many homeowners, it has become difficult to justify struggling to make a mortgage payment they can barely afford on a home that is decreasing in value.