The past year has reminded everyone that the markets occasionally give investors a wild ride. If falling stock prices and bad prospects for the future of the U.S. economy have you thinking you can't endure the ups and downs in your portfolio for even one more day, you're not alone -- but there's something you can do to keep yourself from going nuts.

Unfortunately, a lot of people have decided that the best way to deal with the recent panic is to get out of the stock market entirely. But if you can't afford to give up on stocks without giving up your dreams of financial success -- and most people can't -- then you need to find some investments that will help you stay sane without making you go broke in the process.

Nest eggs at risk
The past few months have everyone confused and scared. Whether you're a first-time investor or a seasoned veteran, Wall Street firm failures and crashing world markets have been shocking and sometimes downright terrifying. It's hard to know how to respond to the rapid-fire changes that have rocked the financial world -- especially when you're seeing your life savings vanish before your eyes.

Front and center in addressing the concerns of those most affected by the financial crisis is Fool retirement expert Robert Brokamp, who's been helping his Rule Your Retirement readers adapt their portfolios to ensure they'll be able to have a successful and comfortable retirement. Reading through his recent newsletter, I picked up a couple of good pieces of advice that investors of all ages should take to heart:

  1. In addition to beating down stock prices, the credit crunch has also created extraordinary values in bonds and other asset classes.
  2. Although you probably need to have at least some of your money invested in stocks, you can find stocks that won't keep you up at night.

I'm not going to talk about bonds -- to see Brokamp's comments on where he sees opportunities, feel free to look for yourself in this month's newsletter. Where I do want to go into more detail, though, is in picking the right stocks for you -- because if you really want to turn your savings into serious money, you just can't get the same long-term results anywhere else.

Stocks you can retire with
To find stability in a topsy-turvy world, start with two questions:

  • What companies will survive in any kind of economy?
  • What stocks will pay investors the income they need through good times and bad?

To find some examples of recession-proof industries, you don't have to look further than your checkbook. What do you pay for, month in and month out, no matter what? Things like food, utilities, medical bills -- these are things that people will find money for even when times are tough.

Yet, owning just any stocks in those defensive industries isn't enough for many investors, especially retirees. Stocks that pay good dividends have two advantages: They put real money in your pocket every quarter, and they necessarily have to be healthier businesses than those that don't have to produce immediate cash flow to pay shareholders.

7 stocks that meet the test
So without further ado, here are seven stocks that have done a good job weathering the storm so far:


1-Year Return

Current Dividend Yield

Avista (NYSE:AVA)



Consolidated Edison (NYSE:ED)



Johnson & Johnson (NYSE:JNJ)



Novartis (NYSE:NVS)



Northwest Natural Gas (NYSE:NWN)



Kellogg (NYSE:K)



General Mills (NYSE:GIS)



Source: Yahoo Finance.

As it turns out, a lot of stocks in these industries pay decent dividend yields. But the stocks listed above also come with a stamp of approval from our Motley Fool CAPS community, as each of them has an above-average rating from our members of four or five stars.

Unfortunately, one lesson we've all learned recently is that even the safest-looking companies can turn out to surprise you. To learn more about fitting defensive stocks like these into a holistic portfolio designed to cushion the blow from those surprises, be sure to look at the rest of Robert Brokamp's advice in this month's Rule Your Retirement. Although it's a paid service, you can get the full scoop with a free 30-day trial.

Stocks may go up and down, but they don't have to drive you crazy -- if you're prepared. With the right portfolio, you can defeat the panic and stay on course to financial success.

For more on staying sane when the financial markets are diving, read about:

Fool contributor Dan Caplinger's portfolio has driven him a bit crazy from time to time over the past year. He doesn't own shares of the companies mentioned in this article. Johnson & Johnson is a Motley Fool Income Investor pick. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy is designed with your sanity in mind.