I have an old friend that loves to gamble. His game is blackjack and he actually wins quite often. He was a math and physics whiz in college and believes he has the advantage in any casino he enters. That said, he does have one particular old habit that causes him to lose and lose big at times. If he’s on a losing streak, he’ll keep doubling down in order to make up for the losses he has incurred.

At times, I have watched him lose spectacular amounts of money with this strategy. So what does this have to do with financial planning and investing? Allow me to share with you what I see happening at the moment.

If you’re like most people that invested in the stock market, the past 6-8 months has wreaked havoc on your portfolio. On top of that, many have watched as the value of their real estate has dropped considerably. Add the concern of losing your job to the mix and you have all the necessary elements for taking unusually high risk with your money, or if we stick with the gambling analogy, doubling down.

I have spoken with many prospective clients the past few weeks and have noticed one common denominator. That is the desire to take unusually high risk to “catch-up” for the losses they have suffered in the market. This risky behavior is understandable yet dangerous at the same time. The stock market, the real estate market, the precious metals market, the commodities market, fill in the blank market, are just waiting for people that take this kind of unnecessary risk.

Can you win and win big by placing all your bets on black or red, sure you can. Can you lose big as well, you better believe you can.

As many investors come out of shock and start to assess the damage from the recent crash, it will be mighty tempting to put it all on red or black. You can count on all sorts of advertisements that will prey on this desire to want to recoup your losses. Be careful and beware of these offers. If it sounds too good to be true, it probably is.

Now is the time to reflect on what your risk tolerance actually is. If you had too much money in the stock market prior to the crash, lesson learned. Attempting to make up for the losses you may have incurred by doubling down on one or two stocks or investing only in high growth/high risk investments is a recipe for disaster. The odds of beating the market are very slim.

Better to accept where you are today financially, understand how your current situation affects your short-term and long-term financial goals and design a new financial plan that gets you to your destination safe and sound.