It’s another week of wild market swings for the Dow — triple digits up one day, triple digits down the next. The financial news media makes sense of the mayhem by drawing connections to political moves in Europe or to big consumer news like the Kindle Fire launch by Amazon (NASDAQ:AMZN).

Here’s the reality: These daily swings in the Dow are meaningless to 99% of investors. While the nightly news loves to talk about big numbers, those numbers only matter if you’re looking to trade stocks on a day-to-day or hour-to-hour basis.

Yes, there have been maddening gyrations in the market during the past few months. But we haven’t really gone anywhere. And probably won’t anytime soon.

Consider this: In early August, Standard & Poor’s downgraded America’s credit rating. The Dow plunged 600 points the next trading day — even as I wrote about how the S&P downgrade changes nothing. I was derided for that column on such a brutal day, but a lot has changed in two months. Though the Dow Jones bottomed out around 10,800 on Aug. 8, it is at 11,200 as of this writing. Ten-year T-Notes are at less than 2% yield, so everyone didn’t bail Treasuries, either. So why all the panic over a downgrade that has all but been forgotten?

Because folks just need to feel like the market has direction. Nobody wants to admit we are stuck in a low-growth economy and a flat-lining stock market. But we are.

Nothing is Really “News”

More relevant to the current state of the market, earlier this month I wrote how Germany would inevitably sign on to a broader Greek bailout despite its reluctance. The Dow bottomed out (again) at just above 10,800 the day of publication. During the past few days the markets have rallied, and today we are greeted by “news” that Germany’s parliament overwhelmingly signed on to an emergency fund of $600 billion for the euro zone. Just as expected.

This is not to say everything is hunky dory on Wall Street and there’s no reason to worry. Frankly, I think the run-up in stocks is overdone — just as the selloff was overdone, too.

The bottom line is the global economy is struggling mightily under big-picture issues of stagnant growth, persistent unemployment and massive government debts that someone is going to have to pay for eventually. And until those issues get resolved, investors can expect the market to be full of sound and fury, signifying nothing.

Buy and Hold, Seek Dividends

It’s counterintuitive to claim that as we see such wild swings in the market, we are going nowhere. But when you look at the year-to-date performance of the market, you see we are pretty much flat. In fact, since January 2010 we are pretty much flat. It’s just that we were oversold in summer 2010 and overbought earlier this year.



Click to EnlargeThat’s an ugly scenario, I know. But there is a way through this mess. Buy-and-hold strategy is not dead, especially if you find high-yield dividend stocks.

Consider that AT&T (NYSE:T) and Verizon (NYSE:VZ) have been paying a 6% dividend across this period. In this crazy market, a 6% annual return should be music to investors’ ears.

And remember that buy and hold doesn’t mean you have to see your stock soundly in the green after just a few weeks. If you wait for a pullback in the range of Dow 10,500-10,800 — which was identified in both the S&P downgrade debacle and the earlier September market slide as a “floor” for the market — you can buy into a great stock at a decent price. And in a year or two, when investors get optimistic about the economy again, that’s when you will make your profits.

I know it’s difficult to “settle” for 6% returns via dividends or to trust that the market will be 10% or 20% above that Dow 10,500 floor in 2012 or 2013. But you have to ask yourself if the risk of an aggressive strategy is really necessary for you. Are you trying to protect your money or buy a private island?

Fear is in our DNA — and it’s natural to watch your 401(k) balance go down and wonder if it will ever go back up. It’s also human nature to hear stories of people making a killing in this volatile market and wonder how you can get in on the action.

But being motivated by fear and greed on a daily basis is the high-stress mind-set among day-traders, not folks who work a day job and just want to grow their nest egg.

There are safer ways to protect and grow your money than to get sucked into the Wall Street casino. Because if you’re caught on the wrong side of a trade in this volatile market, you can do much more harm than good.

Jeff Reeves is editor of InvestorPlace.com. Follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook.