Most people simply hate stocks.
According to a June 2012 survey conducted by the University of Chicago and Northwestern University, 84% of respondents say the stock market is untrustworthy and that it's foolish to put your money into stocks.
I can see their point. Bernard Madoff may be the poster child for Wall Street fraud -- but he's got plenty of company.
Even if Wall Street could clean up its act, it's easy to understand why investors take a dim view toward stocks: The S&P 500 is actually 15% lower than where it stood five years ago. In fact, it's lower than where it stood back in 2000. Cash under the mattress would have been a better investment.
But I think there's a better way to look at things. After all, over longer time frames, stocks perform quite well. Even though the last 10 years could be considered a "lost decade" for stocks, the S&P 500 has moved from below 200 in 1985 to above 1,400 today -- a gain of more than 600% over 25 years.
That's cold comfort for investors right now. At the moment, our economy looks weak, and the rest of the world looks even worse. That's why investors have their heads tucked between their legs, bracing for the impact of another crash.
But don't count on such a dire outcome coming to pass. If history is any guide, stocks will likely be higher five or 10 years from now, and your retirement portfolio can finally start to make major progress.
That's because while I think stocks in general will be much higher a decade from now, the market could suffer some scary plunges along the way. To protect yourself from the gut-wrenching volatility, it's wisest to focus on "safe stocks."
That term should be used a bit loosely, as no stock is immune from falling in value. But if you know where to look, you can find an entire class of stocks that have proven their mettle, through good economies and bad. These stocks are likely to deliver quiet and steady gains rather than neck-snapping spikes and plunges.
Hussman's Open Letter to the Fed; The Problem with Bubbles; Textbook Pre-Crash Bubble; Reflections on Not Chasing Bubbles; Integrity vs. Respect | Mike Shedlock