Fear and greed are supposed to compete for people s investment decisions. Right now the battle seems between two fears. There s the fear of owning stocks should they plunge to new depths, and the fear of not owning them should they steadily regain for investors the wealth they have lost, and more.

Add another worry: Stocks might thrash about from day to day but ultimately go nowhere, and they might continue doing so for a couple of years. That seems all too likely if you believe, as I argued in the April issue of SmartMoney Magazine, that we re not in an extraordinary period, financially speaking, but an increasingly normal one. Consider some signs:

Profits

Last year earnings underlying the S&P 500 index plummeted 40%. The size of the drop was abnormal, but where we ve ended up isn t. In 2006 after-tax profits for U.S. companies made up 7% of gross domestic income, compared with an average since 1929 of closer to 5%. Last year we returned to 5.1%.

Savings

Company profits grew fat off plenty of consumer spending. During 2006 and 2007 Americans saved less than 1% of their after-tax income. In January and February they socked away more than 4% of after-tax income (or more accurately, applied that much to their credit-card balances). Reporters make that seem like a sign that consumers have turned alarmingly frugal. Have they? Since 1929 personal savings has averaged 7.4% of after-tax income. We re moving toward normalcy, not away from it.

Houses

Our spending spurt wasn t fueled by wages, since wage gains in prior years were mostly eclipsed by inflation. Rather, buying power came from a puffing up of prices for assets, especially houses. In April 2007 I argued that house prices were twice as expensive as they should have been. I based that judgment on the historical relationship between house prices and annual rents (which is to real estate what the price/earnings ratio is to stocks). House prices have since fallen 30%. While there s no inflation to speak of at the moment, we ve had several percentage points worth since 2007, and that counts as part of the decline, so call it 35%. Politicians are clamoring for programs to stop house prices from falling. (Never mind that the same people have clamored in recent years for more affordability programs.) Evidence suggests prices don t need propping up, but are instead closing in on where they ought to be (and in some markets are already there).

Stocks

Even after their recent rally, U.S. shares are more than 40% below their October 2007 high. That doesn t mean they re underpriced, though. If the drop was justified by a fall in stock earnings, which was justified by a fall in corporate profits as a share of the economy, which was justified by a drop in spending, which was justified by a drop in asset prices, which never should have been bloated to begin with, then we might be back to normal. The S&P 500 index trades at 17 times trailing earnings, but that misleads because fourth-quarter earnings were erased altogether by write-downs. Ignore the fourth quarter by sticking the first quarter of 2009 in its place, and the index s P/E works out to about 14. That s the average for U.S. stocks over the past 130 years.

Put it all together. House prices might creep a bit lower in some markets. Spending might contract a little more. That might offset whatever growth the economy would have produced over the next couple of years. Overall, earnings might flatline. And stocks might move wildly from day to day but keep coming back to Dow 8000. It should be a familiar number by now. We first hit it in July 1997, and then came back just over a year later, then two years after that, and then again in November. Between each of those return trips it set fresh highs -- 9300, then 11900, then 14000.

Eventually stocks will move higher for good. For now, be ready for a stretch of investment boredom, broken only by a fizzled rally or two. That shouldn t discourage savers. A pause in prices is the perfect time to spend well less than you make and diligently stash more money in the market, especially in stocks that can break the price monotony with quarterly dividend payments.