Diversify for a gentler ride

If you worry about the health of the U.S. economy, the government, and the
dollar, you can reduce your investment risk by investing overseas. Most
large U.S. companies do business overseas, so when you invest in larger U.S.
company stocks, you get some international investment exposure. You
can also invest in international company stocks, ideally via mutual funds.
Of course, investing overseas can’t totally protect you. You can’t do much
about a global economic catastrophe. If you worry about the risk of such a
calamity, you should probably also worry about a huge meteor crashing into
Earth. Maybe there’s a way to colonize outer space. . . .
Diversifying your investments can involve more than just your stock portfolio.
You can also hold some real estate investments to diversify your investment
portfolio. Many real estate markets actually appreciated in the early 2000s
while the U.S. stock market was in the doghouse. Conversely, when U.S. real
estate entered a multiyear slump in the mid-2000s, stocks performed well
during that period. In the late 2000s, stock prices fell sharply while real estate
prices in most areas declined, but then stocks came roaring back.