Trust stocks for the long haul

Every now and then I meet someone who will never buy stocks. That is to say, they think that gold, real estate or cash are better and safer alternatives. I can understand how, especially if one has lost money in the stock market or experienced the horrific 32% market dive in 2008 as the Great Recession loomed.

But the facts suggest something different: it's nearly impossible to build wealth -- or retirement income -- without stocks playing a major role. The reason for this is that companies are in business to make money. When you're a shareholder you get a piece of their success. Sometimes a poor economy, politics or incompetent management can take a stock down. But over the long haul, owning a diversified portfolio of stocks (the S&P 500 index, for example) can provide good positive returns over time.

Let's look at the results since 1995 and get a feel for the real downside of stocks. Now I say this in the context of having come through 8 up years in a row -- a down year and/or a recession is inevitable. But you can't time the market so it's essential to stay the course. See how the U.S. stock market has done:

2016 +16.5%

2015 +0.2%

2014 +10.0%

2013 +29.7%

2012 +10.2%

2011 +8.4%

2010 +14.1%

2009 +22.7%

2008 -31.9%

2007 +8.9%

2006 +19.0%

2005 +1.7%

2004 +5.3%

2003 +28.3%

2002 -15.0%

2001 -5.4%

2000 -4.8%

1999 +27.2%

1998 +18.1%

1997 +24.9%

1996 +28.7%

1995 +36.9%