As I contemplate my financial new year goals, I find myself questioning whether I've grown more conservative after the worst financial crisis since the Great Depression.
To recap, the United States housing market collapsed in 2007. The situation got worse when investment bank Lehman Brothers filed for bankruptcy protection in September 2008, and AIG, the world's largest insurer, almost went under.
These events created shockwaves globally and sent markets into a tailspin. In Singapore, thousands of retail investors who had bought Lehman Minibonds saw their savings disintegrate. These supposedly low-risk products turned out to be convoluted credit-linked notes.
Thanks to unprecedented intervention by governments worldwide - from rock-bottom interest rates to massive loans to prop up ailing banks - things began to look up for the global economy and financial markets.
I never stopped investing during the crisis. I picked up beaten- up stocks during the worst of times, and adopted a disciplined approach through an automatic dividend re-investment plan.
But over the past year, in the face of renewed fears of a double- dip recession in the US and a sovereign default in the euro zone, I've lowered my weighting to stocks in favour of cold, hard cash.
With the last crisis etched in my memory, I've become much more sceptical about aggressive investment strategies.
Over in the US, the appetite for stock market risk appears to be falling among small investors.
More money was pulled out of US stock mutual funds last year than in any year since the 1980s, with the exception of 2008 when the global financial crisis peaked, according to the Investment Company Institute which represents mutual funds that collectively hold about US$11 trillion (S$14 trillion).
That happened even though the stock market has flourished over the last two years as it bounced back from lows reached in the early part of 2009.
While all that cash was flowing out of stocks, investors put billions of dollars into bond funds.
The crisis has also affected the investment behaviour of the ultra rich.
Societe Generale Private Banking said that in terms of where the very wealthy are investing their money, the pendulum has swung from 'extreme complexity' - such as hedge funds and derivatives - to products which are simpler, more transparent and which offer more liquidity.
It could take several years before it becomes clear whether this conservativeness among investors will mark a long-term shift in psychology.
After technology shares crashed in the early 2000s, investors re-entered the stock market pretty quickly - but bigger economic calamities like the Great Depression affected investors' attitudes towards money for decades.
While conservative investing styles have gained attention in the past year, it remains to be seen how soon risk-taking activities will come roaring back in a big way.
With bank deposit rates nearly negligible, investors are looking for ways to make their money work harder for them.
Credit Suisse private banker Tee Fong Seng said that in the aftermath of the crisis, its very wealthy clients preferred bonds and safe stocks - but some of them are now having exposure to more risky venture capital investing and even structured products like accumulators.
Is it not dangerous that complex products are back in demand, I asked him. 'But why should one stop financial engineering making progress?' Mr Tee replied.
'The only reason why one got caught in 2008 was that the financial products did not match the client's profile. If we want to progress in the world, we've to allow innovation.'
Some argue that modern finance has increased the depth and severity of crises while providing little or no benefit to the broader economy.
From society's perspective, it brings scant gain. But if we seek to eliminate innovation, who will create the next Microsoft or Google? How will poorer countries have easy access to credit and capital?
Just as other bouts of innovation - from automobiles to the Internet - led to financial booms and busts, so too did the US housing bubble.
Surely that in itself should not be an indictment of innovation. Perhaps it is not so much whether financial innovation is useful or not, but what form it takes and whether there will be adequate safeguards to ensure it does not worsen economic outcomes in the future.
As memories of the Lehman Minibonds fiasco fade over time, I foresee more risk-taking activities among retail investors here.
What every investor must remember is that while risk is a natural part of investing, he needs to find his own comfort level with risk. A portfolio that carries a significant degree of risk may have the potential for outstanding returns, but it may also fail dramatically.
My own comfort level with risk for 2011 should pass the good night's sleep test. This coming year, I'm going to invest cautiously, but act on the opportunities should they come.