Rule No. 5: Diversify to Control Risk

Editor's note: Jim Cramer's new book, Real Money: Sane Investing in an Insane World, is available in selected bookstores now. As a special bonus to RealMoney readers, we will be running Cramer's "Twenty-Five Rules of Investing." For more about the new book and to order it, click here. Today, we present Cramer's fifth rule of investing. To read about his first rule, click here; for his second, click here; for his third, click here; for his fourth, click here.

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If you control the downside, the upside will take care of itself. I have always believed that to be the case. But controlling the downside means managing the risk. ...