Perhaps the biggest job that any investor has is managing risk. If you take too much, you could be flirting with disaster; if you take too little, you could cheat yourself out of the returns you need to take care of yourself, your family and your heirs. Let's see how to get this important equation right.

Convertibles. No, we're not talking about the Dodge Viper that you've been eyeing at the local car dealership. Convertible bonds are simply bonds that can be later converted into stock.

Convertible bonds are bonds issued by a company that are convertible into common stock. Like all bonds, they also provide a yield (interest). However, this yield is also slightly lower than most corporate bonds (bonds issued by a company) offer. The current average yield is about 4%.