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One way to do that is to invest in lower-risk stocks, but another option is reducing risk by diversifying your portfolio in general. A great way to do that is by investing in stocks from outside the United States. While there is some performance overlap between domestic and international stocks, they aren’t totally correlated.
For instance, I measured the correlation between the SPDR S&P 500 ETF (SPY) and the iShares MSCI EAFE ETF (EFA), which measures the international stock market. EFA is 85% correlated to SPY. But if you’re picking individual stocks, that correlation goes down even more.
