NEW YORK (CNN/Money) - There's a paradox at the heart of the recent stock market rally: Few investors seem to believe the upturn is for real, and yet they keep pouring billions of dollars into equities.

What's the reason for this boldness, which is backed by so little conviction? You can put the blame on TINA. That's not a person; it's short for the old political slogan "There Is No Alternative."

Midyear Investment Forecast • Table: 15 timely stocks • 6 stocks: featured profiles

In fact, for long-term investors, there really is no good alternative to stocks right now. The Federal Reserve has reduced short-term interest rates to the lowest level since 1958. Treasury bonds are paying a paltry 4.4 percent. And though real estate has continued to show strength, property values will probably soften as soon as mortgage rates start rising from today's rock-bottom levels.

Many market commentators are warning that the current rally may again sputter out. They point out that the economy remains torpid. Deflation is a risk. Companies are being stingy with capital spending. Unemployment is still rising.

Most ominous, some forecasters say, is the fact that growth stocks are rising far in advance of any substantial earnings improvement.

Once again, investors seem to be buying the sizzle and not the steak.

Regardless, investors' return to the market may be a signal that the case for stocks is stronger than most observers recognize.

Sentiment should come into line with market behavior -- and not the other way around. To see why, we need to examine three issues:

1) investors' misapprehensions about market corrections

2) the prospects for stocks based on the economy

3) the impact of liquidity

Consider the first point. Many investors seem to believe that stocks are doomed to perform badly during the next decade to the same extent and for the same length of time that they performed well during the 1990s.

It's the Biblical scheme of seven lean years following seven fat years.

In fact, though, the stock market doesn't behave like a mechanical pendulum, with each swing to the plus side exactly matched by a swing to the minus side. Stock valuations can remain above or below the norm for years at a time.

From 1969 to 1982, while the economy was mired in stagflation, there were four bear markets, two of which were devastating.

And the bull markets in between fell far short of bringing valuations fully up to normal levels. The Dow was actually lower at the end of the period than it was 14 years earlier.

Now, however, underlying conditions are far more favorable. Given today's low inflation and interest rates, we could now be facing a period where bear markets never fully take back previous gains.

Over the long term, high-quality stocks have earned an average of 11 to 12 percent a year.

It's true that periods of returns far above that level will eventually be offset by stretches of subpar returns. It's also true that big run-ups in price/earnings ratios are typically followed by pullbacks.

But an increase in average P/Es to 25, say, doesn't necessarily mean that a drop to 11 or 12 is inevitable. Sometimes market P/Es may not even go all the way back to the long-term average of 16.

P/Es are still slightly above their average range for the past 60 years. If P/Es fall further before the bear market finally ends, additional losses could limit average returns over the next five years to as little as 5 to 7 percent.

But if the decline in P/Es is over for this cycle, then at worst stocks might underperform slightly, averaging 9 to 10 percent.

Compared with the returns of the 1990s, that may not sound like grounds for celebration, but it means that high-quality stocks with at least average growth prospects are a more compelling long-term buy than most available alternatives.

Now consider the second issue: The most convincing argument for equities today is the state of the economy -- not so much the outlook for the next quarter or two, but rather the general climate. Inflation is the deadliest poison for stocks, and sharply rising interest rates are a close second.

But neither of those risks is imminent. There's so little inflation pressure at present that economists are more worried about the remote dangers of falling prices than about a resurgence of price hikes.

And while interest rates would tick up in a recovery, they're still likely to remain in a below-average range for some time.

Continued low inflation and low interest rates would justify higher than normal P/Es, as long as the economy continues to move toward recovery. All the evidence suggests that that's exactly what's happening. The recent decline in gross domestic product was actually less severe than the 1990-91 drop, which caused a far milder bear market.

And over the past 18 months, GDP has been expanding at a fairly healthy clip. Why should that trend continue?

In a word: liquidity -- the third issue.

Over the past two years, the Federal Reserve's 13 reductions in short-term interest rates and the Bush administration's fiscal policies have pumped money into the economy.

So far, all that stimulus has had little visible effect. Economists describe that as pushing on a string -- you can make it easy for businesses and individuals to borrow plenty of cash, but you can't force them to spend or invest it.

A slight change in psychology, however, from defensive to more aggressive, is all that's needed to spur an investment boom.

In short, the prevalence of low inflation and low interest rates indicates that stock valuations need not decline further. And the cumulative stimulus of Fed policy and the federal deficit should enable corporate profits not only to catch up with recent gains in share prices but also to drive stocks higher.

Once you accept the long-term case for stocks, there's no point in worrying about short-term timing since alternative investments are currently offering so little. What if the economic recovery is delayed?

If you buy a blue chip with a 3 percent yield today and end up sitting with it for nine months, the dividends will still amount to three times what you would have earned over the same period in a money-market fund. So don't be afraid of dipping your toe back into the water.

There's no reason to race to get fully invested, but it does make sense to begin moving cash back into equities little by little. The most attractive shares in the current market are those of large, financially strong companies that offer total returns matching or slightly exceeding the historical average of 11 to 12 percent a year.

We screened a universe of companies with annual revenue and market capitalizations of more than $3 billion to find growth stocks with projected returns over the next five years (based on both earnings growth and dividend yields) totaling more than 11 percent annually.

Fifteen promising companies passed the screen. See them here.