The Art of Healthy RISK-TAKING.

• Author: HYATT, RALPH

"The key variables to consider are temperament, age, health, knowledge of the particular act, the nature of the risks involved, one's previous tolerance for similar risks, the ability to set appropriate objectives, and the flexibility to judge objectively when to change an approach that no longer makes sense. ..."

WHY WOULD race car driver Dale Earnhardt, nicknamed "The Intimidator" because of his numerous fearless attempts to bump rivals ferociously out of the way, perhaps smashing them into a solid stone wall, be foolish enough during what turned out to be his final NASCAR race to zig-zag around the field at 170 miles an hour, leading to his death in Daytona, Fla., as the victim of a crash caused by his trying to block a rival competitor on the last lap? On the surface, there seemed not to be an iota of the natural emotion of fear in his mind and heart concerning the possible dangers of dozens of vehicles vying to squeeze through relatively small spaces between them.

The instinctive human tendency to avoid being seriously hurt, perhaps killed, seemed to be missing. Moreover, Earnhardt was not properly strapped into his seat, and he refused to wear a specially made head and neck harness that might have saved his life. Surely it wasn't money that motivated him to take those risks. He already owned his own racing team, which earned millions of dollars a year. Nor could it have been his need for fame. After all, he had won seven Winston Cup championships. He was unanimously considered by his peers to be the best NASCAR driver ever. In states where car racing is very popular--and there are quite a few--people name their children after him. What could induce that sort of mindlessness in a man who has been described by his friends and family as kind, sensitive, and bright? What was he trying to prove? And to whom?

Earnhardt put it this way: "These guys on my team are proud to be champions. They just love being the ones everybody looks at and points to. They enjoy that and they want it again. The bonuses and paychecks are just gravy for them. The meat and potatoes are winning on Sunday."

Let's take a peak at another adventuresome, risky arena--Wall Street. Thousands of us are glued daily to the cable channel MSNBC for financial news or keep in close touch with our stockbrokers in order to follow the value of our investments as they move upward, downward, or not at all. In an up market, the rush of our bodily pulses and the elation of our minds egg us on to "make more of it while the making is good."

The lure of wealth strangles the commonly held healthy notions of prudence and moderation. A powerful, mystical sense of trust develops: The Dow has no place to go but heavenward! The web of neuronal components that make up the brain appears to be creating a lopsided view of reality. The poisonous mental hormone called "greed" manages to suffocate the logic typically utilized for ordinary problem-solving. A major objective is to become rich with all the others who are boasting about their economic successes. This goal becomes not only paramount, but delusional.

The compelling desire for greater profits becomes the justification for selecting investment vehicles that are risky; at times, very risky. Tried-and-tree strategies for safety such as dollar-averaging, asset allocation, and laddering are thrown to the wind. With graphs mainly depicting linear lines moving upward, the dizzying bodily rush increases exponentially. Horizontal lines (and certainly downward...