The most amazing thing about the stock market's recent rally hasn't been its impressive gains. Or the fact that it's happened despite all the structural issues that still plague the economy.

It's that more average investors haven't been lured back into the game. In fact, at least one measure of stock-market trading activity has dropped to levels last seen in 1999.

This despite the best efforts of Wall Street -- and of its central banking allies, who have pumped tons of cash into the system -- to get the market moving up for good. People looking to simply build retirement nest eggs or college savings aren't sold.

After years of stomach-churning volatility, scandals, bubbles and the rise of market-manipulating trading computers, American investors have had enough. They're choosing to park their cash in bonds, despite returns that in many cases don't even match inflation. What money they have in stocks sits uncomfortably in bland and broad index funds -- investments you make because you lack options, not because you're hopeful.

Thus, we're in the midst of a long ice age for stocks -- a deep freeze not unlike the long sideways scrambles seen during the Great Depression and World War II. The market can't get healthy if people don't want to play.

This isn't likely to end anytime soon. Here's why -- and how companies can break the cycle with one simple change.

Is anybody out there?

Sure, there are signs some investors are getting excited again. For example, the total money betting on a market decline via the Rydex mutual funds family dropped last week to an all-time low, passing levels last seen January 2001 and May 2011. (Both were bad times to be bullish; major market declines followed soon after.)

Image: Anthony Mirhaydari

Anthony Mirhaydari

But this doesn't tell us much about everyday investors -- most of them don't short.

Rather, while stories about disillusioned investors are not new, the evidence is mounting that they plan to stay gone. There's no official head count of those who've given up on stocks, but consider these trends:

● Trading volume on the NYSE dropped to a fresh nonholiday decade low earlier this week. Prices are rising, but few investors are buying. This isn't the self-perpetuating feeding frenzy that keeps a rally rolling.

● The 50-day average of trading volume has returned to levels last seen in 1999 -- despite an economy that is now $2.4 trillion larger.

● This is happening against a backdrop in which computers are doing more and more of the trading. Computer-driven trading accounts for nearly 80% of trading volume now, according to researchers at Northwestern University. If trading levels are unchanged and computer trading is up this far, individual investors have left.

● Data from the mutual fund analysts at EPFR shows that foreign and domestic equity holdings have dropped below levels seen in 2001, as cumulative outflows have outpaced inflows. Over the past decade, more cash has come out of stocks via mutual funds than has gone in.

All this tells me a lot of investors have left the building. And it's hard to fault them.

Invest in this mess?

Sure, the major indexes are up right now. But they're only regaining past highs. We've been here before.

Despite all the bailouts, credit downgrades, government spending, austerity pledges and middle-of-the-night summits, the structural situation remains a mess here and abroad. Policymakers are focused on austerity and budget cuts, not growing economies. Company profits have been high, but they're rolling over. The eurozone is tipping into a new recession. The U.S. economy is hesitating as temporary drivers -- such as people tapping their savings to buy holiday gifts -- fade.

People are facing stagnant wages and rising prices, and they are still worried about their jobs. It doesn't help that gas prices are pushing toward new highs.

More broadly, we just don't trust the market.

It wasn't that long ago, after all, when average folks buzzed about how stocks were enriching their 401k's, and workers looked forward to retiring early. Now we long for real pensions and hope we don't get involuntarily retired. That's a sea change. And it's reflected in the data.

Image: Cumulative fund flows © MSN Money

EPFR's database shows that our love affair with stocks has died. Since the 2007 high, the amount of money held in stock-based mutual funds has dropped by nearly $400 billion. Cumulative inflows into equity funds over the past 10 years total just $43 billion.

Meanwhile, investors have overwhelmingly shifted to bonds. Over the past 10 years, cumulative inflows into bond funds have totaled more than $772 billion, with the vast majority coming since the 2007 stock market peak. This shift is all about the perceived safety and security of the steady stream of payments bonds provide, versus the unreliable returns of stocks.

One example: The NYSE Composite Index ($NYA.X), despite corporate earnings surging to new record highs, is trading 20% below its 2007 peak.

Even in the midst of the recent rally, there are warning signs flashing red, like the rise in the CBOE Market Volatility Index ($VIX), the weakness in materials stocks -- especially steel-makers like AK Steel (AKS, news) -- and the pullback in high-yield corporate bonds. Or the fact that signs of market instability are resurfacing, signs eerily similar to the May 6, 2010, "flash crash" that featured a plunge of nearly 1,000 points in the Dow as Athens burned.

Well, once again, Athens is burning. And once again, markets are freezing, with crude oil futures getting shut down on Monday for more than an hour as computers -- an "algo" trading system -- overloaded the CME's Globex crude market.

Continued on the next page. Stocks mentioned include Kimberly-Clark (KMB, news) and Tiffany (TIF, news).