It's always fascinating to read stories about average, everyday people who built fortunes by regularly investing small amounts over long periods of time in time-tested companies such as American Express (NYSE: AXP), Hewlett-Packard (NYSE: HPQ), and ExxonMobil (NYSE: XOM).

In retrospect, it's easy to see how these fortunes can be built -- American Express, Hewlett-Packard, and ExxonMobil have returned 13.8%, 14.4%, and 15.4% annually over the past three decades, respectively. But each of these companies achieved this despite massive falls in their share prices at certain points. American Express' most recent plunge from the 2007 recession is in the realm of a whopping 80%, while HP was resoundingly punished following the dot-com meltdown, and ExxonMobil has taken big dips during deep cycles in oil and gas prices.

But that's precisely the big secret -- the long-term returns of these companies were boosted by having dividends reinvested when the stock price was on sale. And with each of these three still below recent highs and paying dividends, current shareholders are getting a good deal today. Investors can also mimic this powerful return-boosting principle by buying a stock in portions to manage risk. And the current market would definitely count as one of those opportune times to buy cheap stocks.

First, find a solid business
Of course, not every stock will yield such impressive gains, but big returns on investments always come on the backs of fundamentally strong businesses. And if you're confident that you've purchased shares in a great company, why wouldn't you consider buying again, particularly if the stock price is significantly below its intrinsic value? Especially in volatile markets, fundamentally strong businesses can be bought for good prices -- or even downright outrageously cheap.

For many large, stable companies, buying more shares when the outlook is bleak has shown to be especially rewarding. For instance, family entertainment specialist and theme park operator Walt Disney (NYSE: DIS) was hit hard when tourism dropped in the wake of 9/11, even as the creative juices in its animated-film division seemed to be drying up. But investors who saw long-term value in the Disney brand and bought on the pessimism are in a happy place today. Their investment is up more than 130% from the lows of September 2001 -- far better than the S&P over that time frame.

For younger, riskier companies, a strategy of acquiring shares in portions is a smart play. It limits your initial outlay and reduces your exposure to significant drops, should the company falter or broader economic conditions change.

For example, look at top retailer Best Buy (NYSE: BBY). The stock soared several hundred percent in the late 1990s, only to be whacked for a more-than-60% loss from the market's peak in March 2000 until the end of that year. While many investors were licking their wounds and thinking they should have sold sooner, patient investors who saw long-term value and competitive advantages in Best Buy were taking advantage of the pessimism.

Even after a brutal 2008, in which Best Buy lost more than 60% of its value at one point, shares have rebounded over the long haul. They're now up nearly 390% from their 2000 low. Even with the current rebound in the market, investors with a long-term view still may find great opportunities in stocks that have been beaten down by larger economic conditions that will likely prove temporary.

Buy again
Other strong performers, such as Cisco Systems (Nasdaq: CSCO) and Starbucks (Nasdaq: SBUX), have experienced big drops in share price at some point, only to come roaring back and rankle investors that sold early. Cisco has fallen victim to short-term dips in technology spending cycles, and many thought Starbucks' best days were behind it because of overexpansion, but each has largely overcome these temporary fears. In fact, Starbucks just reported another solid quarter, boosting shares and demonstrating again that the best time to buy was back when many had written the company off. Investors who focused on the underlying businesses, rather than the stock prices, were more likely to turn these events into opportunities.

In my opinion, each of the companies discussed here has a long track record of success and historically sound management, and is worth dripping a few more dollars into and buying again. The final caveat with this method is to ensure that you aren't throwing good money at a truly deteriorating company; hence the importance of understanding the underlying business and larger trends. In their Motley Fool Stock Advisor service, David and Tom Gardner track all of their investments and re-recommend promising companies when the price is right.

This article was originally published Feb. 12, 2007. It has been updated.

Fool contributor Dave Mock buys pogs again and again -- more for sentimental than intrinsic value. He owns shares of Starbucks and ExxonMobil. American Express, Best Buy, and Walt Disney are Motley Fool Inside Value selections. Best Buy, Walt Disney, and Starbucks are Stock Advisor picks. The Fool owns shares of Best Buy. The Motley Fool's disclosure policy keeps a shopping list handy.