If you're going to manage your own investments, it is crucial to ensure that no one disaster results in utterly catastrophic losses. The goal is to protect yourself -- not only from outright frauds such as Enron, WorldCom, and Global Crossing -- but from the legitimate firms whose shares got shellacked. Think about the plummet we saw in Amazon ( AMZN), Yahoo ( YHOO), EMC ( EMC) and Sun Microsystems ( SUNW) after the tech bubble burst; the full list is way too long to detail here. In my opinion, managing risk and limiting losses are the most consequential -- and underappreciated -- aspect of investing. Loss limitation has a much greater impact on portfolio performance than either stock selection or market timing. How you manage the risk in your holdings will have a more profound bearing on financial success than your stock selection. It's a shame the subject is not "sexy" enough to warrant greater attention in the financial media.