"Better to be too credulous than too skeptical." Is that true?

An ancient Chinese proverb says just that, “Better to be too credulous than too skeptical.” But bear in mind that it was written at a time when China was ruled by capricious, authoritarian tyrants. The proverb may have had more to do with their desire that their word and actions never face critical analysis than with some ultimate paradigm for living life.

Clearly it is possible to be too credulous. Those who believe everything they hear must simultaneously hold completely contradictory statements to be equally true. To accept everything is to know nothing.

It’s equally true that one can be too skeptical. Those who accept nothing new, who always demand more evidence, are frozen in their understanding of things while the world marches on, leaving them behind.

Where do you think the sweet spot lies between credulity and skepticism? How do you attempt to maintain the proper balance?