The past 10 years have been pretty rough on investors. Before the subprime meltdown and the pursuant financial apocalypse, we had the frenzied dot-com bust of the early 2000s. In fact, if you had placed your extra cash in a trusted index fund a decade ago, you'd most likely have lost money -- the S&P 500 has averaged a dreadful -0.5% since then.

And yet we were told over and over again that we'd be better off placing the bulk of our money in stocks. Jeremy Siegel, Wharton Professor and academic superstar, asserted in his 1994 book Stocks for the Long Run that over the last 200 years, stocks have reigned supreme.

So what the heck happened?

You want answers?
In his book, Siegel used data from 1802-2001 to demonstrate that stocks have outperformed bonds in every 30-year period except for one. He also argues that, over time, the after-inflation return of common stocks will outperform fixed income assets while simultaneously reducing the risk of your portfolio.

Nevertheless, the past 10 years will most likely prove to be the first negative-return decade for stocks since the 1930s. That's some pretty solid evidence that, depending on your definition of long term, stocks haven't performed so well -- even for buy-and-hold investors.

In the worst 18 months of the tech bust, over $5 trillion of value was wiped out of the markets. Oracle (NASDAQ:ORCL) and Cisco Systems (NASDAQ:CSCO), for example, still haven't returned to their previous highs. During the most recent recession, investors panicked as the S&P plunged by 57% in about a year and half.

Does this mean Siegel was wrong?

I want the truth!
Siegel points out that many investors took his philosophy and ran blindly into the bull market of the 1990s without regard for price. If you bought shares of Yahoo! (NASDAQ:YHOO) when it was trading for $475 a share ($118.75 adjusted for splits), you probably weren't thinking much about value. Similarly, if you were scooping up companies like Bank of America or AIG at the height of 2007, you may not have been properly balancing risk versus reward.

In other words, investors have simply been paying too much for too little -- over and over and over. While Siegel's research suggests stocks as a whole will go up over the long term, it says little to nothing about individual companies -- especially if investors buy them at the height of a bubble.

Siegel has recently pointed out that despite the Great Depression, despite stagflation, despite the tech bust, and despite the credit crisis, the only 30-year period in which stocks did not outperform bonds was from 1831-1861. In addition, unlike bonds, stocks have never suffered negative after-inflation returns for any 20-year period or longer.

I don't know about you, but notwithstanding the pain of the last 10 years, I like the odds of the stock market. Yes, there may be a rare decade where the market gets truly shaken to its core. Yes, we have to remain patient, dedicated, buy-and-hold investors if we want to preserve capital and avoid selling at a loss. But those are attributes we can control, and thus investing for financial success remains completely in our control.

So where do I get in?
There are always new companies worth investing in -- companies with sound business models, stellar balance sheets, and major competitive advantages.

For instance, Costco Wholesale (NASDAQ:COST), the no-frills, warehouse retailer, is an excellent example. Its business model is simple -- purchase bulk products, sell at razor-thin margins, and let its customers reap the benefit of inexpensive goods. Costco makes boatloads of cash on its membership fees, and it's managed to increase sales by 8% annually over the last five years. With a clean balance sheet and venerable management, this company is a great pick for the long run.

Or what about SYSCO (NYSE:SYY), the largest purveyor of food products in North America? Distributing food to restaurants, hotels, and universities, this company has a near-stranglehold on the industry, boasting 16% market share and sales that double those of its closest competitor. It consistently generates a return on equity north of 30%, and it pays a hefty 3.6% dividend. Pretty impressive, right?

The trick, as always, is to buy great companies at the right price. For every company, like Oracle, that gets ahead of itself and never catches up, there are companies like Dell (NYSE:DELL) or Microsoft (NASDAQ:MSFT) that have outperformed the market despite crashes, burst bubbles, and cranky economic cycles.

If you'd like to see what other companies we think are poised to outperform, check out our Motley Fool Stock Advisor investing service. David and Tom Gardner, co-founders of the Motley Fool, send you two fully vetted stock ideas each month, and, since 2002, their picks have outperformed the S&P 500 by 49 percentage points. They can't guarantee every stock pick will be a massive hit, but they can help you choose stocks for the long run. We're currently offering a free, 30-day trial -- click here for more information.

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Fool contributor Jordan DiPietro doesn't have a position in any of the stocks above. Costco, Microsoft, and SYSCO are Motley Fool Inside Value picks. Costco is a Stock Advisor recommendation. SYSCO is an Income Investor recommendation. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Costco Wholesale, Oracle, and SYSCO. The Fool has a disclosure policy.