But if you sucked up your gut and entrusted your cash to a Standard & Poor’s 500 Index fund on Jan. 1, 1995, you’ve more than doubled your money. A hundred bucks in the S&P on New Year’s Day 1995 had grown to $220.05 as of Dec. 19, 1997, when we had to stop counting and get the magazine out. If the market ends the year a tad or two above its Dec. 19 level, 1995-97 will go down as the best three-year period ever for U.S. stocks (chart).

Before we proceed, an explanation. The numbers in this article come from my massaging data provided by Ibbotson Associates, a consulting firm. I’m using the S&P rather than the Dow Jones industrial average because the S&P more accurately reflects the broad market. I’m including reinvested dividends, I’m not counting income taxes and I’ve done some rounding.

I’m writing about stocks yet again, because the market’s strong performance is the biggest U.S. business story of the year. And the biggest lesson to learn from this year’s market is that history can mislead you. Lots of people predicted that the 1997 market would be strictly from Blahsville. That’s because stocks returned 37.4 percent in 1995 and 23.1 percent in 1996, but had never made more than 20 percent in three straight years. Given the market’s volatility, 1995-97 may or may not become the best three-year period in history. But it still seems likely to be the first three-year 20 percent-plus trifecta.

Please don’t think this means I’ve given up my congenital skepticism and joined the smiley-face, eternal-summer crowd. I haven’t. I’ve stayed heavily in stocks–and keep buying them in my 401(k) retirement account–because at 53 I’ve got a long way to go before retirement, and I know that I can’t successfully time the market by selling near tops and buying near bottoms. But I’m getting really bothered by the smug idea that’s abroad in the land that stocks only go up. Stocks have returned an average of 11 percent a year, compounded, from the start of 1926 through last November. But that’s an average, not a guarantee. In fact, through July of 1982, just before the current bull market started, stocks had returned only 8.8 percent a year. Since August of 1982, stocks have returned 19.3 percent a year, more than double the previous number. There has been only one down year–1990–since the bull run started.

I think the pre-bull and post-bull disparity helps explain the split you sometimes see between journalistic fossils like me and eternal-summer types who think they know that stocks only go up. The schism is largely along generational lines. I started writing about markets in 1972 in Detroit, just in time for the horrible 1973-74 bear market and one of the auto industry’s periodic collapses. But anyone who’s started writing or investing since 1982 has seen almost nothing but rising stock prices. For them, reading about the 1973-74 market is like my reading about the Great Depression. You know it intellectually, but you don’t feel it in your bones.

The conventional wisdom now is that stocks always go up, and if they go down, you should buy more. Someday–I don’t know when–that will prove to be disastrous. Conventional wisdom always becomes disastrous at the point where it ceases to be wisdom. If you believed the conventional wisdom in the late 1970s that stocks were finished as an attractive investment, you missed the bull market. If you bought into the late 1960s-early 1970s fad that you could safely buy ““one-decision growth stocks’’ and hold them forever, you got slaughtered. If in 1959 you got out of stocks and into bonds because stocks’ dividend yields (cash dividends divided by stock prices) had fallen below the interest yield on long-term Treasuries, you’ve missed the parade.

““You can’t be a successful investor just by looking in the rearview mirror,’’ says David Braverman, a senior investment officer at S&P. ““You have to look forward. All sorts of things happened over the last 70-year period that may never happen again. Are we going to have a Depression and two world wars in the next 70 years?''

The biggest risk in U.S. stocks now is that they’re so high relative to profits. The S&P 500 stocks are trading at a rich 21.5 times their last 12 months of profits and 19 times the next 12 months’ profits predicted by I/B/E/S International. That doesn’t leave much room for error. The story early in the year was that strong growth in Asia would propel U.S. companies’ profits. Kiss that goodbye. This doesn’t necessarily mean that stock prices will crash: it may mean that they will stagnate, or fall slightly.

So should you buy stocks? As always, that’s your decision, not mine. It depends on you, your situation, your tolerance for risk and whether you think you’ll have the courage to stick it out if stocks go into a swoon and don’t recover quickly. In case you’re interested, stocks fell the year after each of the three-year historical periods in our chart. What does this portend for 1998? Beats me. If I could answer that question, I’d be a rich investor, not an ink-stained wretch.