I have one word for you: Diversification.

While it may be tempting to put all your chips on red if you've got a strategy that's worked for you before, the house generally wins if you stay at the table too long. That's why it makes sense to diversify your portfolio when building wealth for the long term while setting aside a little "play money" to gamble on a hot stock or commodity.

How many eggs should you put in each basket? It all depends on your tolerance for risk and your time horizon. Let's face it: If you're about to send your kids to college or planning to retire in a year or two, it doesn't make sense to tie up most of your net worth in real estate, hedge funds, private equity stakes or other investments with long lock-ups and limited liquidity. And despite what the experts may be telling you on CNBC, you should avoid putting too much money in the stock market if you can't stomach the roller coaster ride.

When constructing your portfolio, consider stocks (for growth and appreciation), bonds (for safety and cash flow), real estate (for appreciation and tax benefits) and commodities (to hedge against inflation). For investors who don't have time to watch the market every day, it may be easier to build a diversified portfolio using mutual funds instead of trying to pick and manage individual stocks and bonds.

Capital-preservation funds, which guarantee that you'll get your money back no matter what happens in the market, use debt and equity to generate returns that are more attractive than bonds but safer than stocks. Long-short hedge funds, which seek to buy stocks that look like winners and sell stocks that look like losers, can help you achieve similar results. The only downside to these hedging strategies is that you won't get as much upside as you would with a long-only portfolio if the market takes off. On the other hand, you'll get the security of being able to sleep at night knowing that your portfolio is safe and secure.

What happens if one segment of your portfolio--say, small cap stocks--delivers double-digit returns this year? Then it's time to take your profits and rebalance your portfolio. While it's tempting to sell the losers and let the winners ride, you'd be wise to remember that not even Triple Crown champions come up roses every time.