You can do plenty of things to damp your volatility. The most significant move: Reducing your stock investments and increasing your position in cash and bonds.

Many financial professionals argue that your blend of cash, stocks, and bonds contributes more to your portfolio's return and volatility than what investment styles you practice, what sectors you have exposure to, and what individual securities you choose.

While we believe all of these factors play important roles in your volatility and return, we agree: Asset allocation is huge. And the less of your portfolio you have in stocks and the more you have in bonds and cash, the more sedate your portfolio's performance will be.

Next: Restrain Your Bond Mix >>