"The real key to making money in stocks is not to get scared out of them." Use a proven strategy and stay in the market for the long term.

 Lynch recognized that the stock market was unpredictable in the short term, even to the smartest investors. Over the long term, however, good stocks rise like no other investment vehicle. Lynch's philosophy: Use a proven strategy and stay in the market for the long term and you'll realize those gains, jump in and out and there's a good chance that you'll miss out on a chunk of them.

That, of course, means resisting the temptation to bail when the market takes some short-term hits and good stocks fall in value - no easy task. But as Lynch once said, "The real key to making money in stocks is not to get scared out of them."

Volatility is not risk. Avoid investment advice based on volatility.

So if volatility is not risk, what is?

The major risk is not the short-term stock price volatility that many thousands of academic articles have been written about. Rather it is the possibility of not reaching your long-term investment goal through the growth of your funds in real terms.

Click:
It sure beats FD rates and it is safe too.
http://spreadsheets.google.com/pub?key=tWENexpUrXS_RMxB7k73RgQ&output=html 
  
Take Home Lesson

Using the above definition of risk, stocks are actually the safest investment out there over the long term.

Investors who put some or most of their money into bonds and other investments on the assumption they are lowering their risk are, in fact, deluding themselves.

"Indeed, it goes against the principle we were taught from childhood - that the safest way to save was putting our money in the bank."


Also read:
The Four Essentials of Successful Investing
Forget about Everything Else and Buy Only Stocks
The story of Uncle Chua
Uncle Chua's Portfolio & Dividend Income 
Investment Owner's Contract
What keeps most individual investors from succeeding?
Think for Yourself
Controlling Yourself at Your Own Game: You are your own Worst Enemy
Controlling the Controllable
Time is Money for the Young Investor
Be a shrewd investor
Timing is of no real value to the investor unless it coincides with pricing
Be confident in the quality of your investments
To Invest or Not to Invest: That is NOT the Question
It is the Business that Matters
Finding companies that can be held long-term
Ten Habits of Highly Successful Value Investors