I am not an expert in finance by any means, so my philosophy is to spread out as much as possible and limit what damage I can do.

Most of my investments are in a SEP IRA. I have a lot of mutual funds, some in higher-risk, a lot in index funds. A few bond funds. Just spread out last week into a Pacific mutual fund that looks pretty good. I have some in money market, but not much. Only a few individual stocks. My kids have real (not IRA) accounts, and about half is in an S&P 500 index fund, and half in cash. My wife has a fund we inherited from her Mom that is going like gangbusters. Naturally, this is the one we get taxed on (&*%$#), but having something liquid is a good idea. I had to pull money out of an IRA during a bad time a few years back, and I paid taxes and penalties through the nose.

"Playing" the market is not for the timid, and needs a lot of self-education, but like you point out, it's possible to make a killing in "dollar" stocks (a $1.00 stock that goes up a single dollar doubles in value), but I would only use the kind of money you would drop in your wallet on a trip to Vegas.

I'm just finishing the book "Rich Dad, Poor Dad," which has some interesting views on this subject, including what a real "asset" is. Has a lot in common with the old "Winning Through Intimidation," which has apparently been re-written and re-issued under a new title. Haven't read that one yet.

It takes a somewhat risk-tolerant view of life to become really rich.