IT HAS BEEN HORRENDOUS. The past three years have been the worst for stocks since the Great Depression. From March 24, 2000, through July 23, 2002, Standard & Poor's 500-stock index plunged 48%--almost precisely the same loss as the index suffered in the 1973-74 bear market. But this decline has been more protracted. It's tempting to abandon stocks altogether.

Please don't. This vicious bear market offers a tremendous opportunity. In the six previous times over the past 100 years that the market has fallen 40% or more, subsequent five-, ten-, 15-, 20- and 30-year annualized after-inflation returns have been well above their 7% long-term average. The odds favor stocks going ...