How to back out of market's abyss

We peered into the abyss Friday, dipping below the 11,000 level in the Dow. That's a 3,000-point drop from the Dow's high in October, in case anyone's keeping track. 

It's pretty ugly, to say the least. Those who advocate a buy-and-hold approach to investing say that these are the best times to buy. Stocks are on sale, essentially. 

My problem is, I don't know which ones are going to be marked clearance or be discontinued a year from now. 

It was also discouraging to read the "Ahead of the Tape" column in the Wall Street Journal on Friday. In addition to discussing General Electric's (GE) dismal performance, it also discussed the overall performance of the market's S&P 500 benchmark over the last 10 years. 

"Investors who put their money into the S&P 500 a decade ago have ended up with nothing, after adjusted for inflation and dividends, according to Merrill Lynch investment strategist Richard Bernstein." 

Being in my 40s, I consider 10 years to be somewhat long-term from an investing standpoint. To think that an investment I made today would yield me nothing, and that I would only have 10 years or so left before retirement, is pretty scary. 

As I've already written, I'm out of stocks for the time being. But certainly not forever. In fact, I have a couple of ideas bouncing around for safety and yield. 

One of them is Southern Company (SO), which owns electric utilities in Georgia, Florida, Alabama and Mississippi. 

The stock has a healthy quarterly dividend of 42 cents a share and its chart shows strong price stability over the past decade. It trades at 15 times earnings. Morningstar gives Southern Company 4 out of 5 stars and a fair value estimate of $41 a share, about five points above where it currently trades. 

Another idea — and don't laugh — is a financial. It's US Bancorp (USB), a Delaware financial holding company that is a favorite of billionaire investor Warren Buffet. 

US Bancorp trades at 10 times earnings and analysts say it was far less exposed to risky subprime loans that are currently weighing on many of its competitors. Morningstar gives it a 5-star rating and a fair value estimate of $41 a share, quite a bit higher than its current $25 range. 

But remember, if price targets were a certainty, we'd all be millionaires. 

Like Southern Company, US Bancorp also sports a handsome quarterly dividend of 42 cents a share. It's 10-year chart has been a bit more choppy than Southern Company's, however. Its 52-week range has been from $25.92 to $35.25. 

Brian