After staging a rousing rally since last March, stock market gains seem to be petering out a bit in the month of October. Consumer confidence dropped somewhat last month as Americans began to question just how strong the nascent recovery really is. While one month of flat market returns and falling consumer sentiment certainly don't represent a new trend, there are other reasons why further stock market gains may prove elusive.

Empty sidelines
A recent report out from Goldman Sachs highlights the fact that there may not be as much investor cash sitting on the sidelines as many people think. "Sideline cash" is an important prospect, since many assume that this cash is potential dry powder for the stock market.

While many pundits have mentioned the $3.4 trillion sitting in money market mutual fund assets as potential inflows, Goldman analysts estimate only about $600 billion of that amount will actually be transferred into the equity market in coming quarters. Much more of that cash will likely move into the bond market, as investors seek safety from recent financial events.

While the stock market will be glad to get any support from investors shaking off their fear of getting back in the game, it looks like that support may not be quite as robust as many had expected. An additional $600 billion flowing into the market may indeed help, but as the Goldman report highlighted, that amount won't be sufficient to sustain a meaningful market rally without significant economic improvements, which will flow over to corporate earnings.

No white knight
So where does that leave investors? Well, it's not the most encouraging information, but that doesn't mean the market is doomed. If investors take anything away from this piece of news, it should be the idea of managing expectations.

The market's had a pretty good run the past few months, and while economic conditions are likely to continue improving, odds are good that returns will taper off a bit, if not head back down. They're just not likely to continue to be as strong as they have since the spring.

Further lasting gains will be dependent on solid economic growth and recovery, which will be slow in developing. But in the meantime, there are still pockets of opportunity that smart investors can exploit, even in light of soggy expected demand and market returns.

Consuming profits
Not everyone has lost confidence in consumers. For instance, fund manager Mark Travis, who runs the strong-performing Intrepid Capital (ICMBX) fund, believes that the key is to stick to basics and buy companies with minimal amounts of leverage and strong management. He's buying stocks like insurance giant Travelers (NYSE:TRV) and natural resources company Newmont Mining (NYSE:NEM).

Personally, I believe that one group of stocks that may hold a lot of promise in the immediate future is the blue-chip consumer staples sector. In a weak and uncertain economic environment, investors should stick with solid, financially stable companies that are market leaders in their respective industries. Consumer staples stocks like Procter & Gamble (NYSE:PG), Philip Morris International (NYSE:PM), and Kraft Foods (NYSE:KFT) are typically thought of as good bear-market investments, since they tend to be more recession-resistant.

In addition, strong management and solid capital structures should also be key characteristics of desirable post-recession investments. Nike (NYSE:NKE) and Coca-Cola (NYSE:KO) are good examples of such stocks.

Most of these consumer names are solid, steady performers, not flashy, high-octane growth stocks. But in periods of slow economic recovery, such as we find ourselves in now, stocks like these are reliable go-to performers.

Where we go from here
Ultimately, odds are good that the market's trajectory from here won't be a straight shot upward. There are a lot of forces working against a continued rebound, including a likely lack of cash waiting to rush back into the scene.

While these short-term gyrations can be unnerving, investors should keep their eyes on the long-run picture. Meanwhile, by keeping expectations in check and shifting money to stable, financially solid equity investments, investors should be able to ride out any coming storm and emerge relatively unscathed on the other end.

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Amanda Kish is the Fool's resident fund advisor for the Rule Your Retirement investment newsletter. At the time of publication, she did not own any of the companies mentioned herein. Coca-Cola is a Motley Fool Inside Value selection. Coca-Cola and Procter & Gamble are Motley Fool Income Investor picks. Philip Morris International is a Motley Fool Global Gains selection. The Fool owns shares of Procter & Gamble. Try any of our Foolish newsletters today, free for 30 days. The Fool has a disclosure policy.