Investors: Try these strategies to build your portfolios

The stock market has gained an average 9.6% a year since 1926, according to Chicago's Ibbotson Associates, not a bit of which has been earned in the past decade.

Nevertheless, many investors count on earning at least that much to reach their retirement goals. Can you still earn 9.6%? Possibly. We suggest a few investments that will get you there — but in this uncertain world, we can't offer any guarantees.

"Reversion to the mean" is a frequently used phrase which means, basically, that the stock market's returns tend to gravitate toward a long-term average. It's a theory that has a few holes in it, obviously.

For one thing, the mean itself is a moving target. From 1926 through 1999, for example, large-company stocks returned an average 11.35%, including reinvested dividends. The difference between the two figures — 1.75 percentage points a year — is enormous. Invest $10,000 at 11.1% a year for 30 years, and you'll have $252,000 in your account at the end of the period. If you get 9.6%, you'll have $156,000.

And as the Securities and Exchange Commission will be glad to remind you, past performance is no guarantee of future gains. Just because large-company stocks have gained an average 9.6% a year since 1926 is no reason that they will do the same during the next 82 years.

Actually, the past 20 years haven't done much heavy lifting. From the end of November 1988 through November 2008, the S&P 500-stock index has gained an average 8.5%, vs. 9.4% for long-term government bonds. (International stocks have fared even worse: The Morgan Stanley Europe, Australasia and Far East Index has gained an average 3.2% a year.)

Despite all the dismal recent returns, however, you'd probably like your investments to earn more than 2.19%, which is what ultrasafe 10-year Treasury notes currently yield. How can you get a 9.6% return or better?

•Pay off credit cards. Many cards currently charge 20% to 30% a year, which, in technical financial terms, is called "obscene." Repaying a card that charges 20% is the rough equivalent of earning 20%. Think of each dollar you pay off as a tear rolling down the cheek of a credit card company CEO.

If you have a big balance and $100 extra a month to pay down your credit cards, consider putting $50 into savings and $50 extra toward your cards. You probably have high credit card balances because you didn't have enough savings. By socking money into savings, you won't have to reach for your credit card when you see smoke curling up from your laptop.

•Invest in your 401(k) to the company match. Never walk away from free money. If you have a 401(k) savings plan and the company matches your contribution, be sure to contribute up to the match. A 50% match is a 50% gain.

OK, those two are layups. Here are a few trickier ones:

•Consider buying an investment-grade corporate bond. By some measures, corporate bonds have been clobbered even more than stocks. Bonds are long-term IOUs, and are backed only by the company issuing them. A Ford bond maturing in October 2009, for example, recently sold for about 71 cents on the dollar. Should the company be around by next Halloween, an investor will have earned about 54%, including principal and interest.

You don't have to bet on the auto industry to get a decent return from corporate bonds. International Paper has a BBB rating from Standard & Poor's. That's the lowest investment-grade rating. Its bond, maturing in June 2014, yields 12.9%. Freeport McMoRan Copper & Gold, another BBB, has a bond that matures in April 2012 that yields about 12.6%.

•Consider buying closed-end municipal bond funds. Closed-end funds issue a set number of shares and trade on stock exchanges, just as stocks do. But many times, their share price is less than the actual value of their holdings.

For example, Nuveen Insured Florida Premium Income NFL had assets worth $13.01 a share as of Tuesday. But its share price was $9.66 — a 25.8% discount, in closed-end parlance. The fund yielded 7.75%, which is free from federal income taxes. A person in the 25% tax bracket would have to earn 10.3% in a taxable bond to get 7.75% after taxes.

The fund has its peculiarities. For one thing, Florida doesn't have a state income tax, so there's no particular incentive for a Floridian to buy the fund. For another, the companies that insure municipal bonds are themselves under fire, so you probably shouldn't put a lot of faith in the "insured" part of the fund's name. And like many closed-end bond funds, NFL can borrow to invest, which amplifies gains and losses. The fund has fallen 23% this year, so it's clearly not without risk. Nevertheless, you're getting stocklike returns in a bond fund, which is unusual.

Finally, you could just hope for the best and buy a broad-based stock fund. If there really is any validity to reversion to the mean, then the next 20 years shouldn't be half as mean as the past 20 were.

John Waggoner is a personal finance columnist for USA TODAY. His Investing column appears Fridays. new book,Bailout: What the Rescue of Bear Stearns and the Credit Crisis Mean for Your Investments, is available through John Wiley & Sons. Click here for an index of Investing columns. His e-mail is