Hard to believe, but the U.S. stock market made its low for this cycle almost a year ago--on October 9, 2002. Despite the sizable gains since then (NASDAQ has leaped as much as 72%), many folks say it still doesn't "feel" like a bull market.

One reason may be that we had a relapse in the early months of this year. (European stock markets didn't bottom until March, and some Asian bourses took until April.) As a result, the bull seems to many, a tad young and unproven.

Also, of course, millions of investors are still nursing the wounds--psychological and financial--of the longest market downturn in 60 years. After the lumps most of us have taken, it's only natural to look for muggers around every corner.

However, business conditions are improving, albeit erratically. Corporate profits surged 17.4% in the second quarter from the year-ago period, to an all-time high. Furthermore, they're on track for another jump in the third quarter. Since profits drive stock prices (at least in the long run), this is welcome news.

Meanwhile, industrial production and retail sales are picking up, a harbinger of better employment prospects in 2004. Once the job market begins to stir again, the economy will kick into a higher gear.

So will the stock market. It may not happen for another couple of months, but the Federal Reserve's continued ultra-loose monetary policy virtually assures that a second leg up is coming for stocks.

"OK, Richard," you say. "I see your point, but I'm still wary of committing a large amount of money to stocks after the market has already gone up as much as it has."

I understand completely. To make the path easier for you, here are three guidelines to follow:

• Keep a balance between stocks and fixed income. There's no need to throw your last penny into the stock market. Even with 35% of our model portfolio in bank CDs and short-term bonds, we've been able to rack up a double-digit increase in our wealth so far this year.

  A balanced portfolio will let you sleep soundly regardless of the stock market's twists and turns.

• Buy the dips. I constantly advise investors to buy stocks, bonds and everything else "on a pullback." Why? Because buying the dips reduces your risk and enhances your profit potential--simultaneously. During the summer, we got an excellent chance to build up our stock portfolios when the Standard & Poor's 500 index dropped as much as 5% in late July and early August.

  The stock market "correction" that began September 19 hasn't hit a final bottom yet. I still expect the major indexes to dip a few more percentage points as we work our way through October.

  But I'm encouraged by what I've seen so far. This pullback is shaping up exactly as it should. To date, the decline has been orderly and mild. No huge down days on Niagara-size volume. Yet, despite the gentleness of the sell-off, speculators are biting their fingernails.

  Take advantage of it. Bring your stock allocation up to full strength in two stages: Plow half your intended cash into stocks when the S&P dips 3% from its most recent intraday high; finish your buying when the index sheds 5%-7% from its peak.

• Emphasize dividend-paying stocks. Yes, I'm well aware that the dividend-poor NASDAQ has led the major stock market indexes so far this year. That's to be expected after a long, severe bear market for technology stocks.

  As the new bull matures, however, investors who cozy up too close to the more speculative tech issues will pay a price. The downswings will grow sharper and more frequent. You'll get a sick feeling in your stomach, tempting you to bail out at a low point.

  Spare yourself that stress. I see no harm in owning a few tech stocks--we've got Cisco, which pays no dividend, in our Profitable Investing model portfolio. But frankly, if you want a tech name to put away right now, I'm more comfortable with Nokia (NYSE: NOK) because it yields a 2% dividend.

  History shows that dividend-paying stocks tend to fluctuate less than stocks with no dividend. Thus, even though I estimate that NOK and CSCO's share prices will gain about the same ground in the coming year (20%-40%), I prefer NOK because it's likely to take us where we're going in a straighter line.

  By the way, I'm not in the least bit troubled by NOK's announcement the other day that handset sales continue to be sluggish. The Finnish cell phone maker has done an heroic job of maintaining profit margins during this soft spell. Once the global economy perks up, demand for handsets and telecom networks (Nokia's other specialty) will take off. The company's bottom line will swell like an Arizona riverbed in a flash flood.

  If you're still worried about the future of cell phones, take a glance at this week's Barron's, which predicts that new products and growing markets could fuel a doubling of NOK's share price. Pay up to $17.

Richard Band is America's #1 investment advisor for individuals seeking low-risk growth. His conservative model portfolios have multiplied eight times in value since 1984, while taking far less risk than popular stock index funds. Band authored Contrary Investing (named "Best Investment Book of the Year"); is an in-demand speaker at investment conferences; and has won numerous awards, including in the coveted "Best Financial Advisory" category multiple times. To try his Profitable Investing service without risk, click here now.