The economic despair seems to be reaching new heights every day, doesn't it?

Lately I've been wondering if the pessimism isn't reaching some sort of crescendo. It certainly seems to be everywhere, with doomsayer par excellence Nouriel Roubini becoming a household name, and ever-more-dire predictions becoming mainstream. S&P to 600? How about 450? 350?

It reminds me of the "Dow 36,000" crowd back in the late 1990s, only in reverse. And just as the moment of maximum exuberance seemed to mark the top of the dot-com boom, it's possible that the mainstreaming of doomsaying means that the point of maximum pessimism isn't too far off. And as all savvy investors know, the point of maximum pessimism -- otherwise known as "the moment when the market has nowhere to go but up" -- is the best time to invest.

For the record -- hold that hate mail! -- I don't think we're there yet. I'm certainly not hopeful enough to join the (extremely short) list of people predicting a new bull market in the near future. I think we're going to drift for a while yet, and I don't discount the possibility that the S&P may get down to 600 or even 500 before things turn around.

Meanwhile, we've got to try to save for retirement. Have we lost our chance to retire rich?

Let's build wealth anyway
The days of buying an index fund and banking on 10% average annual returns may be behind us -- at least for awhile. But that doesn't mean that retirement investing is a hopeless exercise. Even if your retirement nest egg has been clobbered in recent months, it's not hopeless as long as you've got some investment capital left to work with.

And if you're able to invest new money every month, this could be a golden moment to buy stocks -- one you'll tell your grandkids about.

Here are some suggestions to keep your retirement wealth-building on course through this economic storm:

  • Grab the best options in your 401(k) plan. Take a fresh look at the investment options in your plan. Index funds are not necessarily the best way to go at the moment -- the market averages might well be below average for some time yet. At the same time, three out of every four active funds are stinkers. Find the best ones and grab them -- learn how here.
  • Own the right kinds of stocks. Careful selection of the stocks you hold in your IRAs is very important right now -- we don't have bull market momentum to bail us out if we're sloppy with our choices. Right now, I'm thinking in terms of relatively safe bets, and if you're over 50 or so, I'd suggest you think along similar lines. I'm looking for:
    1. Highly-rated value stocks with strong financials and low P/E ratios, like Manitowoc (NYSE:MTW), Unit Corp. (NYSE:UNT), and ENSCO International (NYSE:ESV).
    2. Sturdy companies with (hopefully) sustainable dividends like Eaton (NYSE:ETN), 3M (NYSE:MMM), and Novartis (NYSE:NVS).
    3. The occasional big growth possibility like Marvel Entertainment (NYSE:MVL).
  • Max out those contributions. On the one hand, I'm reluctant to predict a bottom for the market. On the other hand, I know for sure that stocks are a lot cheaper than they were not long ago, and a lot cheaper than they'll be at some point down the road. This is the time to be contributing as much as you can to your 401(k) and IRA accounts, even if you have to tighten the household budget a bit to do it. If you don't, you'll regret it once the recovery takes hold -- trust me on this.
  • Avoid 401(k) loans except as a last resort . A disturbing number of people use their 401(k)s as a sort of backup bank account. Bad plan -- that's money out of the market. Save this option for true emergencies.

Look, this is important
Last but not least, stay on top of your whole financial picture. I can't emphasize the importance of this enough. When times are good, when home equity is rising and the bull market is in full swing, and jobs are easy to come by, it's arguably OK to be a little sloppy with your investment choices and credit cards and spending. As long as the tide is rising, your boat will be lifted.

These are not those times. The margin for error is a lot smaller. It is still possible to build wealth and retire comfortably, but you'll have to squeeze all the return you can out of the options you have available. Cutting discretionary spending, cranking up your savings, and choosing great investments will pay off in the long run.

It's a daunting challenge. If you're feeling daunted, you may want to consider hiring a fee-based investment adviser to help you sort through your options. Alternatively, if you'd like a lower-cost option, check out the Fool's Rule Your Retirement service. With extensive premium content covering the full range of retirement investing issues, model investment portfolios to help you with asset allocation, and a members-only message board staffed by retirement experts, you can get a lot of the same value at a fraction of the cost. Intrigued? How about a test drive? Get full access for 30 days -- free of charge! -- by clicking here.

Fool contributor John Rosevear has no position in the stocks mentioned. 3M is a Motley Fool Inside Value selection. Unit and Marvel Entertainment are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters free for 30 days. The Motley Fool has a disclosure policy.