Here's a two-part investing strategy for the next few months

If you feel disappointed or even angry about the way your investments have performed in the past decade, welcome to the club. Millions of investors are upset at the poor returns that stocks, in particular, have delivered since 2000. The popping of the Internet bubble, followed by the real estate and credit collapse, has left deep scars on many portfolios. In recent weeks, the panic over Europe��s sovereign-debt problems has again torn open old wounds.

I��m not here to sugarcoat the challenges ahead. However, I encourage you to keep investing, prudently and conservatively — because, in due time, another mega-bull market like that of 1982 through 2000 will take hold, sweeping stock prices much higher. You��ll want to be in the game, not on the sidelines, when the ref��s whistle sounds for the kickoff.

What will trigger the next mega-bull? We can already see a number of pieces falling into place:

• U.S. businesses have dramatically streamlined operations in the past couple of years, setting the stage for an extended run of good profitability.
• Consumers have paid down tons of debt, although some work remains to be done here.
• Banks have made significant progress in rebuilding their depleted capital.
• Sooner or later, a growing population will draw down the excess inventory of housing.
• If the Chinese, under pressure from the rest of the world, continue to let their currency drift upward, America��s battered manufacturing sector might even enjoy something of a renaissance.

The only major player that hasn��t begun to clean up its financial act is, of course, the federal government. During the next two or three congressional election cycles, we��re likely to witness a pitched battle over government spending. Once the entitlements issue is settled, the nation will have removed the last barrier to a new era of growth and prosperity.

Here��s my forecast: Assuming average earnings gro! wth and average P/E ratios, with four recessions of average to greater-than-average severity along the way, I figure that the S&P 500 index could trade at 3,919 by 2030. That��s the equivalent of more than 37,000 on the Dow Jones Industrial Average!

More Rivers to Cross

As hopeful as those prospects may seem, we��ve got a few more rivers to cross before we arrive in the Promised Land. Most immediately, 2012 will bring several complicating developments:

• Europe is likely to slip into recession as a result of the ongoing sovereign-debt crisis. China��s growth engine is downshifting. Our own tortoise-slow growth leaves us vulnerable to an external shock.
• America is headed into a presidential campaign with none of the leading candidates committed to a serious program of fiscal reform. The next wave of sovereign-debt panic may well land on our shores.
• In 2012, a record 3.6 million Americans will turn 65, the traditional retirement age. On balance, these people will be sellers of stock, putting downward pressure on share prices.

None of these factors, singly or in combination, guarantees a bear market for stocks next year. But the risk is high enough to justify an exceptional degree of caution. Here��s a two-part strategy I recommend for the next few months:

• Take advantage of the Q4 rally I��ve been predicting to cull your portfolio of volatile, economically sensitive stocks and mutual funds. Fire off your first bunch of sell orders when the S&P 500 rebounds to 1,230, the vicinity of the late-August highs. Sell more in the 1,250-to-1,275 zone, and a final batch at 1,300 or higher. Your overall goal should be to trim the equity weighting in your portfolio by 5% to 10%.
• Use the proceeds of your sales (and any fresh cash from savings or other sources) to build up your holdings of bonds and dividend-rich, low-volatility stocks.
  

Targeting a 15% Return

At this po! int, I w ould focus on the following companies, all of which are still cheap enough to allow at least a 15% total return (dividends plus appreciation) over the next 12 months:

Abbott Laboratories (NYSE:ABT). The maker of drugs and medical devices has upped its dividend 39 consecutive years. It plows 10 cents of every sales dollar into R&D. Current yield: 3.6%. At past five years�� dividend growth rate, Abbott stock��s yield will hit 5% on today��s price by 2014.

Johnson & Johnson (NYSE:JNJ). The world��s strongest health care enterprise, with a triple-A credit rating and a finger in every pie — from drugs, stents and orthopedic devices to consumer products like Band-Aids and Tylenol. With quality-control issues, at certain manufacturing plants now largely resolved, earnings estimates for 2012 are on the upswing. Current yield: 3.5%. Dividends increased 49 years in a row.

PepsiCo (NYSE:PEP). With tremendous diversification — 19 brands with annual sales over $1 billion — PepsiCo is projected to grow faster than archrival Coca-Cola (NYSE:KO) through 2016. PEP also has a forward P/E ratio, based on the next four quarters�� estimated earnings, now virtually the same as at the March 2009 major low. Dividends have sweetened yearly since 1973. Current yield: 3.3%.

Unilever (NYSE:UL). The Anglo-Dutch producer of foods and soaps is remaking itself under brilliant ex-Nestle exec Paul Polman. Dividends have surged 55% (in British pounds) over the past four years. The company now pays quarterly (mid-March, June, etc.), and since there is no U.K. withholding tax, UL fits nicely into retirement accounts. Current yield: 3.8%.