As 2010 begins, investors have taken a collective sigh of relief, confident that the worst appears to behind us -- at least for now. Yet in many ways, the dilemma facing us now is more difficult to resolve than it was last year: Where should you put your money to get the best return while minimizing your risk?

What we've learned
The most important lesson that 2009 taught all of us was how easy it is to invest during a panic.

Of course, it didn't seem so at the time. In the midst of the market meltdown, it seemed like all sorts of companies would go the way of Lehman Brothers and General Motors and head into permanent oblivion. Huge institutions like General Electric (NYSE:GE) and Citigroup (NYSE:C) seemed just a moment away from disappearing like dodos. And it seemed like you'd have to be an idiot to invest in stocks and bonds of these endangered businesses.

Now, of course, we know how the "idiots" who bet big on speculative stocks did -- they cashed in big time. But those gains are in the past, and they can't guide us in figuring out what to do now.

What a difference a year makes
In this month's brand new issue of Rule Your Retirement, the Fool's retirement newsletter, Foolish retirement expert Robert Brokamp talks with renowned financial historian William Bernstein. Having recently written a new book, The Investor's Manifesto, which addresses how to invest for both good times and bad, Bernstein has lots of valuable advice for those trying to figure out how best to navigate today's turbulent markets.

The environment investors find themselves in right now is a lot different from how things looked this time last year. Yet Bernstein urges investors to take a longer-term view of where things stand right now. Although some of last year's winners, such as Goldman Sachs (NYSE:GS) and Boeing (NYSE:BA), are a lot more expensive than they were last March, they and many other stocks are still cheap compared with where they traded in late 2007. Only a few stocks, such as Ford Motor (NYSE:F) and Baidu (NASDAQ:BIDU), have moved on to set brand-new multiyear highs.

Moreover, in the bond market, you won't find as many great opportunities as you did last year, but they haven't disappeared entirely. Spreads on corporate bonds, for instance, have shrunk considerably, but they're still above their historical average levels. Yet rates on Treasuries and other default risk-free investments remain extremely low -- low enough that making a long-term commitment to them could be exactly the wrong move right now.

Make a change?
So as you take your annual look at your overall portfolio, should you take steps to change up your exposure to various investments? In the Rule Your Retirement interview, Bernstein points out that even if you don't believe you can time the market, you still have to consider relative valuation in deciding how to invest your money.

After all, even with the best investments, paying too much can cause a lot of pain. For instance, those who invested in (NASDAQ:AMZN) back in 1999 were proven right that the online retailer would succeed in dominating its niche. But if you paid $110 per share at its tech-boom peak, then you've had a tough road to earn gains that look puny compared to those who waited for shares to fall to their 2001 lows below $10.

Bernstein has a lot of advice to help you invest better in 2010 and beyond. Perhaps the most valuable, though, is to rein in your emotions and know your weaknesses. If you don't have a natural inclination to ignore prevailing market views, for instance, you have to cultivate that tendency -- or else following the herd will destroy you.

Read more
To learn more about how to invest your money right now, be sure to read the entire new issue of Rule Your Retirement when it comes out today at 4 p.m. EST. If you're not already a subscriber, getting access is easy -- just click here and we'll get you started with a no-obligation 30-day free trial.

Fool contributor Dan Caplinger has invested through thick and thin. He owns shares of General Electric. Baidu is a Motley Fool Rule Breakers selection. and Ford Motor are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy is always a great value.