Just like a stopped clock is right twice a day, the best place you could've kept your money during the past year is on the sidelines. But that doesn't mean you should stay there forever.

Lots of people get intimidated by the thought of investing -- especially during times like these. If you're one of them, you've probably heard countless times how you can't afford to wait, and how the earlier you get started with your investing plan, the better off you'll be.

But if you never got around to filling out a mutual fund application or depositing money into a brokerage account, or if you've just kept most of your money in the bank, the huge drop in the market has actually rewarded your procrastination. Does that mean you should just keep waiting until everything stabilizes?

I'll give you my answer: not on your life.

Now is the time
I understand why you might feel differently. After all, everyone everywhere is talking about the chaos in the financial markets. It seems that the Dow hits new lows every day -- lows we haven't seen in a long time. People who've been investing for years have seen their portfolio values drop beneath the total amount of money they originally invested. In hindsight, you would've done better in ultraconservative investments like bonds and money market funds.

And there's no certainty that stocks have stopped crashing. Just this morning, stock futures halted trading because they'd fallen far enough to trigger limits. Dire predictions that seemed apocalyptic just months ago now seem like they could soon become reality. Even if you believe -- as I do -- that the sell-off is a dramatic, irrational overreaction to what's going on in the economy, that irrational behavior could go on for months ... or years.

But no matter how uncertain the stock market is right now, one thing is a virtual certainty: If you stick all your savings in bonds and cash, you're not going to reach your financial goals. With yields on Treasuries topping out at 4% as of this writing, you'd have to save a whole lot of money throughout your lifetime in order to gather a nest egg big enough for the retirement lifestyle you want.

The sale of a lifetime
I'm downright jealous of anyone who's just getting started with their investing. Not because they're safely in cash -- but because they have such a low starting point to measure their success. Formerly expensive stocks that many investors have found promising for years are now screaming bargains. Take a look at some of the most widely held companies:

Stock

1-Year Return 

3-Year Annualized Return

Dividend Yield

American Express (NYSE:AXP)

(57.7%)

(19.9%)

2.9%

Microsoft (NASDAQ:MSFT)

(27.5%)

(2.5%)

2.3%

Home Depot (NYSE:HD)

(36.1%)

(20.4%)

4.7%

Merck (NYSE:MRK)

(46.8%)

6.2%

5.4%

Texas Instruments (NYSE:TXN)

(45.1%)

(17.3%)

2.6%

Dow Chemical (NYSE:DOW)

(41.9%)

(14.7%)

6.9%

Verizon (NYSE:VZ)

(37.6%)

1.5%

6.6%

Source: Yahoo! Finance.

On top of the big markdowns on most stocks, falling prices are also making dividend payouts look increasingly attractive. During the bull market of the late 1990s, dividend yields on the S&P 500 dropped to nearly 1%. Now, they're topping 3%. As a result, you don't just have the potential for large capital gains when the market rebounds -- you'll also get paid while you wait.

How to start
If you've never invested before, there are plenty of ways you can get started:

  • Mutual funds. Buying fund shares is as easy as contacting a fund company. Most funds allow online transfers, letting you open an account and invest electronically.
  • Brokers. Opening a brokerage account to buy stocks is also relatively simple. There are plenty of good, inexpensive discount brokers to choose from. Get the full scoop in our broker collection.
  • At work. If you're not participating in your 401(k) plan at work, it's definitely worth the effort to start now. You may well be giving up free money by not taking advantage.

Whatever method you choose, don't wait any longer. No matter how safe it feels on the sidelines, missing out on panic-sold stocks could be the biggest investing mistake you'll ever make.

For more on investing in today's markets, read about:

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Fool contributor Dan Caplinger started investing early and never looked back. He doesn't own shares of the companies mentioned in this article. Dow Chemical is a Motley Fool Income Investor pick. Microsoft, Home Depot, and American Express are Motley Fool Inside Value picks. The Fool owns shares of American Express. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy is a helping hand.