The world economy might be improving, or it might be on the verge of ruin. The Iraq conflict might inhibit consumer confidence, or maybe no one cares. Auto unions might strike, soybean prices might explode, a hurricane might blow the Pentagon into Pennsylvania and the Red Sox might win the World Series.

All things are possible, but for twice-burned investors fretful about whether to tiptoe back into the surging stock market, only one thing is certain: No major bottom in financial history was easy to call at the time. Each was obscured by flaws that forced private investors to the sidelines to await one last piece of data that would make the future more clear.

Yet no such final, irrefutable evidence ever comes. Investing must be done without certainty because reward only comes with risk. If you weren't scared, it wouldn't be the right time.

After all, the very best time to have invested this year was back in March when the world, at the onset of war, looked its bleakest. Some intrepid souls obviously did take advantage of those moments, and they made out handsomely. The rest of the world could only watch with wonder.

It's Still a Good Time to Jump In

Paul Desmond, president of Florida-based institutional stock research firm Lowry's Reports, says this phenomenon occurs because "there is not enough money to allow everyone to profit." And he notes that the phenomenon continues today, after six months of rally, as investors who failed to participate at the start now complain that valuations are too rich, and a crash is surely imminent, among other sorrows.

Desmond's research into 70 years of market bottoms, however, suggests that today is still not such a bad time for private investors to rekindle their interest in stocks. Demand among professionals for the shares of small- and medium-sized companies is increasingly robust and shows no sign of waning, his analysis shows.

Meanwhile, current owners of those shares are more reluctant than ever to part with them. "Selling pressure," Desmond's term for volume during down days, is at a five-year low. This combination of strong desire to buy and modest desire to sell is a recipe for continued rally, as only higher prices on the part of bidders will pry those shares loose.

Each of the nine different types of advance-decline lines that Desmond monitors rose to a new high last week, suggesting that interest in stocks is broadening. History shows that rallies become increasingly narrow, or selective, in the last four to six months of major market advances, turning the advance-decline lines negative. Thus, Desmond proposes, "despite high valuations, it is too early to abandon this market advance."

30 Picks for an Uncertain World

If you've waited this long to dive into stocks, you are probably not the sort of braveheart who gets a thrill from volatility. So to get you restarted I'm going to propose a list of stocks that are notable as much for their steadfastness as for their current strength. Investments have to be somewhat risky, or they would not pay off. But if I'm not mistaken, most of these could go into children's college education funds or personal retirement accounts without undue concern.

None are in the technology field, though most make good use of technology. None mine gold or other basic materials. All are innovative in their own ways, but none are going to get you many points on the cocktail party circuit if you try to explain their product or service.

What these 30 small-cap and mid-cap stocks do have in common are prices currently trading very close to five-year highs.

Before that idea scares you off, consider that the single most distinguishing factor about these stocks is that virtually all of them recorded positive stock returns and fundamental business gains in each of the past five years -- through recession and broad market boom, bust and boom echo.

And the ones that did not were down in just one of those years, and by no more than 10%. It's worth noting that in each of the past five years, they also traded at five-year highs as their fundamental business idea resounded with both customers and investors; their gains aren't just the result of expanding price-to-earnings multiples and tagging along with GDP growth.

All of them have found ways, through clever marketing or internal management, to grow and prosper whether interest rates were rising or falling, whether the broad market was rising or falling, and whether investor interest in their industry groups was waxing or waning.


Oshkosh Truck

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, for example. Shares have advanced about 30% this year as demand for its specialty -- military, construction, long-haul and emergency -- vehicles has improved in line with expectations for the broad economy.

So what, you might say: A lot of companies have seen that or better. What's valuable to observe in this case is that Oshkosh shares pulled the very rare trick of double-digit gains in each of the past five years: 1999 (34%), 2000 (51%), 2001 (11.6%), 2002 (27%) and 2003 (29%). The company has grown on a fundamental level every one of those years at about a 20% clip, yet its price-to-earnings multiple is well within reason at around 20. Institutions own only about 17% of the $1.2-billion-market-cap company, so there is plenty of room for more buying among public funds.

Or how about


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? The company makes equipment to move, measure, mix, dispense and spray a variety of fluids for customers in the industrial, automotive, contractor and lubrication-equipment industries. Pretty dull. The P/E multiple of 21 is a bit expensive for a company growing at 11% to 15%, but investors always pay up for consistent results without surprises. This stock rose 23% in 1999, 17% in 2000, 43% in 2001, 11% last year and is up 35% in 2003 -- again, a relatively rare phenomenon.

Two names that are a bit more interesting:

Harmon International . This company is one of the few American companies remaining in the home and auto hi-fi business. It set sales and earnings records in its latest fiscal year and has made a lot of headway in innovating "infotainment" systems for high-end automakers Mercedes-Benz, BMW, Porsche and Audi. The stock was up 47% in 1999, 30% in 2000, 23% in 2001, 32% in 2002 and is up 68% in 2003.

Gilead Sciences . This is one of the few biotech companies that has risen well beyond the development stage and has a shot at rivaling giant Amgen for industry leadership. It discovers and develops therapies for infectious diseases such as HIV. It was up 32% in 1999, 53% in 2000, 58% in 2001, 3.4% last year and is up 97% this year.

All of these companies produce well-branded things or services for which demand is relatively noncyclical and for which margins are relatively robust. They mostly had a single good idea, and do it over and over again in more places.

Chelsea Property Group

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is the world's largest owner and operator of high-end outlet malls. If you've ever been to one, you realize they are busy, attractive, cash-flow-generating machines. It would probably take a pretty stupid move by management, or an economic depression, to knock this outfit off its rails. Shares fell 9% in 1999, but rose 35% in 2000, 42% in 2001, 44% in 2002 and 44% in 2003. The dividend yield is 4.5%.

I'll track these names for the next few years and let you know how it goes. Meanwhile, send me suggestions of stocks you think deserve to be on the list -- shares trading near five-year highs; up in at least four of the past five calendar years and no one-year decline greater than 10%, with a minimum 100,000 shares traded daily -- and I'll publish it in a future column.

Jon D. Markman is senior investment strategist and portfolio manager at Pinnacle Investment Advisors. While he cannot provide personalized investment advice or recommendations, he welcomes column critiques and comments at At the time of publication, he had no positions in stocks mentioned in this column.