Many investors are worried about how much further the market has to fall.

But that's a huge mistake. These are the least risky market conditions we've seen in a long time.

Quite simply, if there ever were a time to invest without reservations, now is that time. Why?

Despite what modern portfolio theorists will tell you, for an investor, risk isn't defined by how often share prices go up and down. That's just volatility, and though it can be stressful, it's meaningless in the long run.

Real risk, on the other hand, is the probability that you'll lose the capital you've invested -- forever.

Rule No. 1: Don't lose money.
To see why this is the least risky market in a long time, let's look at the margin of safety -- the gap between a company's estimated intrinsic value and its market price. 

The margin of safety accounts for the possibility that an investor made mistakes in calculating a company's value. (Since that calculation's based on judgments and assumptions about the future, there are always errors.) It helps to ensure that you are, in fact, buying stocks for less than they're worth.

Since the market is mostly efficient, stocks will eventually return to something like true value. The higher the margin of safety when you buy, the less risky that investment really is -- because it's less likely that you'll lose that capital than it is that the stock will make that return over time.

Rule No. 2: Remember Rule No. 1.
When market prices tumble, that margin of safety -- at least for solid, well-capitalized companies -- grows.

And that means that right now, there are some excellent businesses selling with significant margins of safety.

Bill Ackman of Pershing Square Capital, an activist hedge fund which owns a substantial stake in companies like Wendy's/Arby's Group (NYSE:WEN) and General Growth Properties (NYSE:GGP), explains the current market environment this way, "Risk is high now for the leveraged short-term investor, but actually much lower for the unleveraged, long-term investor in high quality, mid and large capitalization, modestly leveraged businesses."

Which means ...
As my Foolish colleague Rich Greifner put it: This is the opportunity you've been waiting for.

During 2008, only 14 companies in the S&P 500 Index -- just 2.8% -- ended the year with a gain (not including dividends). Those that did end in positive territory were largely those that offered value to consumers, such as Wal-Mart (NYSE:WMT) and McDonald's (NYSE:MCD).

Though consumer spending has waned, unemployment has risen, and economists have finally declared a recession, does it really make sense that the other 97.2% of American businesses are less valuable than they were a year ago?

Take S&P 500 member and Motley Fool Stock Advisor recommendation National Oilwell Varco (NYSE:NOV), for instance. Analysts expect that its final 2008 numbers will show more than a 35% increase over 2007's sales. In fact, numbers reported in September already showed sales up 33.4% over the previous year. But it lost nearly 70% of its market value in 2008.

But has anything fundamentally changed? No. Although the price of oil has come down significantly, the company's products are in steady demand regardless of what oil trades for. With a solid balance sheet and $11.8 billion in backlog, temporary commodity fluctuations should have no bearing on this company's long-term prospects.

In other words, this supplier of oil and gas drilling equipment is less risky now than it was four months ago.

Something similar is true of Morningstar (NASDAQ:MORN) and UnitedHealth Group (NYSE:UNH), as well, which are also strong companies that have seen their share prices slashed over the past 12 months.

In the most recent issue of Stock Advisor, David and Tom Gardner recommended two more companies that are down substantially from their 52-week highs, and which offer a significant amount of upside potential (read: margin of safety) for long-term investors -- one of which rewarded investors with gains of more than 750% the first time it was recommended to subscribers.

I invite you to take a peek at these two picks today, completely free. Our 30-day free trial lets you see all past issues, and there's no obligation to subscribe. But if you've ever considered joining the service, this is the time -- because now through Tuesday, Motley Fool Stock Advisor is offering a special Inauguration sale. You can now get a 12-month membership for only $99 -- a more than 30% discount. Click here for more information.

Adam J. Wiederman owns no shares of the companies mentioned above. The Motley Fool owns shares of Morningstar and UnitedHealth Group, which are Stock Advisor recommendations. National Oilwell Varco is also a Stock Advisor recommendation. Wal-Mart and UnitedHealth Group are Inside Value recommendations. The Motley Fool's strict disclosure policy can be found here.