It's a classic investor mistake: Too many people buy when they should sell, and sell when they should buy. But that doesn't mean it's too late for small investors like you to make good money in the market.

According to a Wall Street Journal report on data from the Investment Company Institute (ICI), the mutual fund trade organization, stock funds have finally begun posting net inflows after six months of withdrawals. However, my closer look at ICI data revealed that for all of 2009 and 2010 (so far), net inflows into bond funds have surpassed any inflows into stock funds -- often by a wide margin.

The classic problem
Clearly, most investors have been pouring money into bonds. Traumatized by 2008's nearly 40% crash, they've been either withdrawing money from stocks, or putting relatively little into them. Nonetheless, the S&P 500 gained 26% in 2009, and it's up 7% so far in 2010. In contrast, the Vanguard Total Bond Market (BND) fund has only risen by single digits in both years.

Clearly, investors whose panic kept them out of the stock market since 2008 lost out on big gains. But are those investors too late to join the party now?

Bargains abound
Plenty of experts agree that now is still a great time to be buying stocks, especially blue chips. And really, no matter what the market does, there will always be bargain stocks with strong growth and reasonable valuations.

Some companies may be bargains because they're in cyclical industries, and this is their time to lie fallow. Semiconductor and circuitry specialists Micron Technology (Nasdaq: MU) and Cirrus Logic (Nasdaq: CRUS) could fall into this category. The recession has caused many companies to slow production of electronics, but at some point, that will reverse, filling pent-up demand. There are already signs of growth in the industry, with global semiconductor sales in August up 33% over year-ago levels. Both Micron and Cirrus disappointed investors with their most recent quarterly reports, but analysts believe that earnings at Cirrus have hit bottom while Micron should see income stabilize in its 2011 fiscal year.

Uncertainty often keeps stock prices down. In the health-care industry, investors have fretted over the potential effects of legislative reforms, which may explain Teva Pharmaceutical's (Nasdaq: TEVA) somewhat depressed price. Still, investors need to remember that Teva is also a major producer of generic drugs, which could benefit from reform. Also, drug benefit manager Medco Health (NYSE: MHS) stands to gain as our new health reforms bring in millions of newly insured people who need medications.

Another kind of uncertainty can stem from disasters and scandals. The shadow of the massive Gulf of Mexico oil spill has held back companies such as Transocean (NYSE: RIG), but eventually, investors will start looking forward and seeing the company's continuing profit potential. Right now, its single-digit P/E lingers well below its five-year average.

Whatever the overall economy is doing, small investors can still find great bargains. There's a place for both bonds and stocks in our portfolios, as long as we don't let greed and fear sway our decisions about which to invest in at any given time.

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Longtime Fool contributor Selena Maranjian doesn't own shares of the companies mentioned in this article. MedcoHealth Solutions is a Motley Fool Stock Advisor recommendation. The Fool owns shares of Teva Pharmaceutical. Try any of our investing newsletter services free for 30 days. The Motley Fool is Fools writing for Fools.