The hope has faded. After decades of accepting the stock market as the path to prosperity, people no longer believe capitalism's pledge that by dutifully saving and investing, anyone can participate in the economy's great ability to create wealth.

Trading volumes have collapsed this summer, returning to levels not seen in 13 years, as investors pull money out of stocks and move into cash and bonds. According to Lipper data, nearly $12 billion was pulled out of equity funds last week -- the largest outflow in two years -- despite the market's relatively buoyant performance recently.

Yet, for reasons I'll get to in a moment, it's exactly the wrong time to get out of stocks. So what's the problem?

Disappointment builds

For one, performance hasn't been good enough. The Standard & Poor's 500 Index ($INX) is still trading below its 1999 and 2007 highs as it remains in the midst of an epic, churning trading range. The index has crossed the 1,380 level -- about where it stands today -- on a closing basis no less than 59 times over this period. So while corporate profits have surged to all-time highs, the typical investor hasn't felt that success.

Image: Anthony Mirhaydari

Anthony Mirhaydari

The economy has a lot to do with it; the specter of financial crisis and possibility of another meltdown, along with stagnant wages and weak home prices, have kept investors on the sidelines. We're also in the political season, which means that half the politicians want us to think about how terrible things are now and how we need drastic change, while the other half wants us to remember how much worse things were before.

All the while, everyone wonders what will happen with health care, taxes and spending.

Image: NYSE Composite Index ©

Plus, Wall Street's shenanigans suggest the deck is stacked ever higher against the little guy. There's an us-versus-them mentality -- shown in stories such as the ongoing Libor interest rate scandal -- that has spread like a cancer. You've got predatory computer trading algorithms, an initial public offering process more about letting insiders cash out than raising capital for growth, and a financial system that seems to live off of fraud, criminality and an almost joyous dishonestly.

Still, now's the time to be buying stocks, not stuffing dollars under your mattress or paying the banks or Uncle Sam for the benefit of lending them your money. After all, 10-year Treasury bonds are paying only 1.5% interest, while core consumer inflation -- less food and energy -- is running at 2.2%. The slow knife of negative real interest rates can kill your wealth pretty quickly.

So let's look at a couple of the factors keeping regular investors out of stocks in the hope I can persuade you to get back in the game -- because, even in this environment, you can't afford to stay out.

The fear of recession

The biggest bugaboo for many right now is the specter of another recession, perhaps caused by a eurozone breakup or some other crisis.

I don't believe this is likely right now. Central bankers around the world are unleashing a coordinated dose of monetary stimulus. More simply, while money has been really cheap since the end of 2008, even more cheap dollars, pounds, euros, yen and yuan are about to flow into the financial system.

In fact, never in recorded human history has money been as cheap as it is now. You can see this in the chart below of central bank rates, starting with St. Genoa Bank in 1522 through 1625, the Bank of England through 1913, and the Federal Reserve policy rate now. Here at home, 10-year yields have already dropped below the old low of 1.55% set in November 1945, falling to 1.4% last week. This helps inoculate the system from shocks and should keep recession at bay, because all modern downturns have been associated with tighter money.

Image: GFD Central Bank Discount Rate Index © MSN Money

Also, while growth of the U.S. gross domestic product slowed to just 1.5% in the second quarter, I don't think we'll succumb to the "stall speed" dynamics you often hear discussed. The thinking is that as growth slows below some minimum threshold, believed to be around 2%, confidence drops and consumers and businesses pull back. This results in a further drop in confidence and a downward spiral leading to recession.

The evidence doesn't support this idea, given all the idled capacity still in our economy -- empty factories and unemployed laborers -- despite the fact that GDP is reaching new highs. Since 1950, economic growth has fallen below stall speed 18 times, but only 10 of those periods have been followed by recession. And in nine of the 10 occasions, the economy was operating above capacity.

Recently, in "A new US Recession? Not yet," (I discussed why I expect the economy to benefit from a few short-term positives in the months to come -- so be sure to check that out if you haven't already.)

So no, things aren't perfect. And there are unresolved structural issues, including the government's long-term problem in funding entitlements such as Social Security and Medicare and the looming fiscal cliff of tax hikes and spending cuts due in early 2013 that are worth some 5% of GDP.

But the situation isn't totally bleak, and recession isn't likely.

Stocks and funds mentioned on the next page: First Majestic Silver (AG), Endeavour Silver (EXK) and iShares MSCI Brazil Index (EWZ).