I believe we are at the tail end of a nationwide real estate bubble. By any fundamental perspective, property prices have gotten out of hand. In some locations, this may mean a significant depreciation. In other, better locations (the Sun Belt, certain cities), it may mean a two- to four-year deflation of 10 percent or 15 percent. The worst depreciation will probably occur with condominiums, which are traditionally overpriced, overfinanced, and too heavily owned by speculators during bubble periods. That said, I’m confident that you will be able to find good real estate deals this year, next year, and each year thereafter during the downturn.

You can reduce the risk in starting your own small business by sticking closely to what you already know. By “what you know,” I mean (1) the product or service you are selling and (2) the primary method by which you are going to sell it.

Serially successful entrepreneurs follow this formula. They spend thousands of hours figuring out how a particular business works—and once they understand it, they seldom jump into something entirely different.

My own rule for starting a new business is this: One baby step at a time. By that, I mean that I’m willing to try something new—but just a little new. If, for example, I’ve learned how to sell cat food with banner ads on the Internet, I might consider setting up a business that sells cat food with small ads in magazines. (That’s one baby step. If I can’t figure out magazine advertising, I can get out quickly and safely.) But I wouldn’t let myself get into a business that sold cat health-care products through direct mail—even if I could convince myself that I’m an expert in selling cat products. Selling cat health-care products through direct mail is simply too many steps away from my core competence.

If you develop expertise in a particular business and don’t stray too far from it, you’ll always feel confident that you can create a new business without taking a lot of risk.

Muni funds can also play with the value of your shares to your disadvantage. Muni issues are rarely traded. Muni managers can use any reasonable value for fund assets. Though credit quality may have deteriorated, managers often refrain from writing down asset values for fear of losing shareholders. However, at some point asset values must be marked to market to avoid outright fraud and jail time for the fund managers. If you buy fund shares at a high valuation of assets and later have to redeem when assets are written down to realistic levels, you will justifiably feel betrayed.

Fund managers can also turn tax-free munis into taxable bonds. Capital gains from selling appreciated muni bonds are taxable. Individual savers typically hold munis until maturity so there are no capital gains. Muni fund managers trade bonds. This creates capital gains, often short-term capital gains, which are taxed at the highest rate. Muni funds are outside the comfort zone of most savers.