Bear Stearns was too big to fail. AIG was too big to fail. Fannie Mae and Freddie Mac were too big to fail. Your portfolio? Not too big to fail.

But although none of us is going to get a government handout (excuse me, investment) to save our retirement, you can work on making your portfolio too good to fail. Here's how.

Diversify!
The best way to prevent a portfolio meltdown is to ensure that you aren't overweighted in any one stock, sector, or asset class. Worst-case scenario: Having a substantial chuck of your portfolio in one company or even one industry could mean you'll watch most of your money evaporate overnight. Everyone's hurting right now, but imagine what your portfolio would look like if you'd been entirely invested in financials.

It's standard advice, but it's hard to follow: At one time, my stock in Time Warner (NYSE:TWX) represented a big chunk of my portfolio, and I didn't have any more faith in it than in my other holdings. This is especially true if you have considerable investments tied up in your employer's stock, because you want to support the company you work for. But as employees of Bear Sterns and Lehman Brothers learned, even companies we really believe in can fail -- and take our retirements with them.

However you do it, make sure that if one company, one industry, or one asset class suddenly experiences a substantial negative return, you can balance it out with other investments.

Include international exposure
Although it's tempting to stick close to home, many economies are growing more rapidly than ours -- and the experts are recommending that we all have far more of our portfolio abroad than we do currently.

You can invest in foreign companies or even in American companies with significant operations abroad. ExxonMobil (NYSE:XOM), for example, generates more than half of its revenue internationally. Just make sure you're poised to profit from global growth.

Look for track records
It's tempting to bet big on exciting new companies with lots of buzz, but it's hard to tell whether companies like Crocs (NASDAQ:CROX) are the next big thing or only a flash in the pan. If you decide to invest in a go-go stock, keep your bet modest and make sure a substantial portion of your portfolio is in companies with strong long-term track records.

Take Johnson & Johnson (NYSE:JNJ). On its website, it claims "75 consecutive years of sales increases, 24 consecutive years of adjusted earnings increases, and 46 consecutive years of dividend increases." Over the past 10 years, Johnson & Johnson has outperformed the S&P 500 by more than 7% annually.

Past performance is, of course, no guarantee of future results. But a strong track record can give you confidence than the company is well-positioned, well-managed, and competitive over the long term.

Include dividend payers
A great way to support your portfolio in all markets is to invest in some dividend payers. Studies have shown that dividend payers as a group outperform non-dividend payers -- and they do so even more during bear markets.

So what should you look for?

  • A strong but reasonable dividend -- if it looks too good to be true, it usually is
  • A non-cyclical industry
  • A track record of maintaining and raising dividends
  • Positive free cash flow

Wells Fargo (NYSE:WFC), Merck (NYSE:MRK), and Dow Chemical (NYSE:DOW), for example, were recently sporting dividend yields of more than 4% -- and all of them have been paying dividends for at least 75 years. Further research into companies like these can help you find the kind of dividend payers that will help you outperform the market.

The Foolish bottom line
You can't prevent a market crash, but you can better position your portfolio to weather all kinds of market events.

At Motley Fool Income Investor, we're always on the lookout for the strongest dividend payers -- whether they're here or abroad. Our picks are beating the market by more than 3% on average, and they sport an average yield of more than 6%. Want to see what we're recommending for new money now? Click here for a 30-day free trial -- there's no obligation to subscribe.

Longtime Fool contributor Selena Maranjian owns shares of Time Warner and Johnson & Johnson. Crocs is a Motley Fool Hidden Gems Pay Dirt selection. Johnson & Johnson and Dow Chemical are Income Investor recommendations. The Motley Fool is Fools writing for Fools.