Investors who thought they could count on stocks to make up for the mediocre savings they have socked away in 401(k)s and IRAs are having an awakening.

And it's not a happy one.

For eight years, the stock market has not cooperated. Instead of providing the 15-percent-a-year returns people enjoyed in the 1990s, the market has become a Scrooge.

Not only has the stock market not lived up to its historical average of 10 percent annual returns, but the benchmark Standard & Poor's 500 stock market index stands significantly lower today than it did at the start of the decade. Earlier this month, with investors worried about plunging home prices and surging oil, the S&P 500 fell below 1,400.

"It's a lost decade," said Howard Silverblatt, a senior index analyst at S&P.

Even with the dividends that the 500 large stocks in the index pay, investors have earned only 8.9 percent total, he said.

There has not been a decade this bad for investors since the Great Depression.

And the next worst period in history, the 1970s, gave investors a 1.6 percent annual return, he said. There is no coincidence that the 2000s are resembling the 1970s. Besides an array of economic forces that weighed on the market then, the 1970s began like the 2000s, with elation over a group of stocks that were presumed to be good investments at any cost.

The 2000s, of course, began with elation over technology stocks and resulted in a 49 percent drop in the S&P 500 when investors discovered they overpaid for the stocks. Just as the market was about to recover, the housing craze happened.

An investor who would have assembled a classic portfolio, with 60 percent invested in the S&P 500 and 40 percent in a broadly diversified bond fund that mimicked the Lehman U.S. Aggregate index, would have turned $1 invested on Dec. 31, 1999, into $1.32 at the end of last month, noted Michele Gambera, Ibbotson Associates Inc.'s chief economist. The simple portfolio would have grown about 32 percent.

An investor who assembled a more elaborate mixture did even better. With 30 percent invested in the large stocks of the S&P 500, 10 percent invested in the small stocks of the Russell 2000 index, 20 percent invested in the MSCI EAFE developed countries international stock index, 30 percent in the Lehman bond market index and 10 percent in cash, an investor would have turned $1 into $1.44, Gambera said.

And an even more elaborate mixture would have turned $1 into $1.72, or a 72 percent return.

That portfolio, Gambera said, would have: 20 percent in the S&P 500, 10 percent in the Russell 2000, 15 percent in the MSCI EAFE developed international index, 5 percent in the MSCI EM emerging-markets index, 5 percent in real estate investment trusts, 15 percent in the Lehman Aggregate Bond Index, 10 percent in the Lehman high-yield bond index, 10 percent in non-U.S. bonds in industrialized nations, 5 percent in cash, 2 percent in gold, and 3 percent in the Goldman Sachs commodities index.

"There's no excuse not to do this," Gambera said. Investors do not have to assemble complex portfolios. Rather, Gambera said, they can buy target-date funds in which a fund manager combines diverse stock and bond investments in proportions geared to preparing a person to retire on a certain date.

For example, a person retiring in 2010 would choose a target-date fund with that date in the name and would have a portfolio divided roughly 60 or 70 percent in stocks and the rest in bonds and cash.

Investors should not assume, however, that those funds will not lose money. While the S&P 500 lost about 17 percent between Oct. 9 and March 17, the average target-date fund geared for people retiring in 2010 lost 7.9 percent, according to Morningstar Inc. For the last eight years, the average 2010 target-date fund tracked by Morningstar has averaged a 3.7 percent return a year.

Gail MarksJarvis is a personal finance columnist for the Chicago Tribune. Contact her at gmarksjarvis@tribune.com.