You always hear professional money managers tell people to diversify when they invest. That way if you lose money with one investment it is only one part of your investment portfolio, hopefully it will be more than made up through gains on other investments. That is why many financial advisors recommend that you invest into a wide range of different stocks when you invest into the market.
One other thing you can do is to invest into many different markets. Two markets that work well together are the real estate market and the stock market. Buying a house and renting it out (or buying multiple houses) can work well with investing into the stock market for a few different ways.
The first reason this works well is because you get exposure to two different major markets. Since you are investing into both markets a negative move in one market affects you a lot less. If the stock market crashes then you will take a hit, and it will suck, but you will still have real estate on the side and hopefully that will help you out.
On the other hand if the real estate market crashes then you will lose money on it, but you will still have the stock market on the side. Over time both of these markets tend to do well, but just in case something happens with one of them it is nice to be diversified.
Another advantage to being invested into both of these markets is that each market compliments each other and fills in where the other is weak. You can borrow money when you buy a house so you get a lot of leverage with it.
Buying rental properties can give you a higher return then investing into random stocks because you get a lot more leverage then you can get in the stock market. Now the downside to investing into real estate is really the cash problem. Even though you may be worth half a million dollars on paper it will not fill like you are because all you have to show for it are bills or a small positive cash flow every month.
Stocks are much more liquid then real estate so you don’t find the same problem that you find in the real estate market. If you ever need the money you can always sell your positions and get the money the next day. This makes things a lot easier and can help you out of a bad situation.
Both of these markets have produced great returns for their investors in the past. In short you can get an even more diversified portfolio by investing into both markets and investing wisely into them.
For more ways to invest money here is an article on Different ways of investing money