Gee, this is like waking up to find we’re back in … well, the ’90s.

When the quarter ended June 30, stock market investors learned they’d tallied the best single-quarter results since 1998. The Standard & Poor’s 500 index gained just under 15 percent. For the year, that index was up 11.4 percent. Not bad given that most experts say investors will be lucky to make 6 or 7 percent a year in the foreseeable future.

Sure, all the major indexes are still far below the records set in 2000, but why dwell on that? The important issues now, as always, are: What have we learned from the past, and how do we apply it to the future?

Obviously, this year’s rebound underscores the benefits of sticking with stocks through thick and thin. Investors who bailed out of stocks and are sitting on wads of cash are making less than 1 percent a year in money-market funds as they watch stocks roll up big gains.

Bank savings and money markets are for safety; they don’t produce income or investment returns to speak of — especially after factoring in inflation. If you’re trying to build up value for a child’s college education or your retirement, you’ve got to be in the stock market.

The wonderful stock returns of the second quarter are really a lesson about the value of stocks in general, not the appeal of individual stocks. Broadly diversified stock holdings are good; holding just a few issues is not.

That lesson recently was highlighted when judges in two cases ruled against investors who had sued Merrill Lynch and other firms over dishonest analysts’ reports. In the Merrill case, the judge said the plaintiffs had chosen to be “high-risk speculators” playing in a “free-wheeling casino that lured thousands obsessed with the fantasy of Olympian riches.”

The key problem for the people who brought the suit was they were not Merrill customers and had not relied on the Merrill analyst reports in making their disastrous bets on Internet stocks. They claimed biased recommendations by analyst Henry Blodget had pushed the stock prices to unjustifiable heights, setting the stage for the big losses the investors suffered later.

Investors who were more directly influenced by Blodget might have a better chance in court than did these plaintiffs.

But the fact is, it’s always going to be a big gamble to buy an individual stock. Even honest analysts can be wrong. And even the best-run company can be torpedoed by the unexpected — an unfavorable regulatory ruling, a shift in foreign exchange rates, a bottleneck in parts supplies or spike in energy prices.

To reduce this risk, investors must spread their money among a number of stocks, so that no one holding can demolish the portfolio. How many would it take? That would depend on how risky the stocks were, but 20 would probably be a bare minimum. Many experts would advise twice that.

Hire a broker

For a small investor — someone with a five- or six-figure portfolio — that’s a lot of stocks to find and manage. Use a full-service broker to find them and constantly readjust your portfolio as conditions change, and the trading commissions could easily devour much of your returns.

You could slash the commissions by using a discount broker, but then you’d have to do the research yourself. Not many small investors know enough to do that kind of analysis on their own, and few have the time. Imagine reading the financial reports of 20 companies every quarter and following the news on all those stocks.

And suppose you needed to replace one. To find another gem, you might have to read that pile of information for 20, 50, 100 stocks. What if you had to replace five stocks a year, or 10? The work would be monumental.

This, of course, is why we have mutual funds. Funds provide broad diversification and professional management. The fund-tracking company Lipper Inc. recently reported that the average diversified U.S. stock fund returned 16.82 percent in the second quarter. That beats the S&P 500 index return that seemed so dazzling. If you can do this well, why take on the risk, cost and hassle of playing individual stocks?

Long-term commitment

Another lesson seen in the recent quarter’s results is that stocks are a long-term play. That’s nothing new, of course — the pros have been saying that for years. But it was something many investors forgot when they gambled on the bubble of the late ’90s, or sat on the sidelines during the past three years.

Consider these average annual returns for the universe of 6,489 diversified U.S stock funds: for one year, -1.03 percent; three years, -9.25 percent; 10 years, +8.41 percent; 15 years, +9.92 percent.

The bad news about investing in stocks is that it is risky. Much of the last quarter’s gains are based on investors’ belief the economy will be doing much better by the end of the year. If it doesn’t, those gains could evaporate.

The good news is that stocks have done well during the past 10 years despite the big losses of the past three years.

Information available

If you’re hunting for stock funds, you have a couple of choices. First, hire a fee-only planner to make suggestions. The National Association of Personal Financial Advisors has a referral service at (800) 366-2732, and online at www.napfa.org.

Or search on your own. There are many fund-searching services on the Internet, but most just pass on data from Morningstar Inc., the Illinois fund-tracking firm, at www.morningstar.com. The site has lots of instructions on selecting funds, as well as a good fund-searching tool. The free service is good, but I think the extra features of the premium service are worth the $11.95 per month charge.

NonInternet users should get the $20 printed guide, Morningstar Funds 500. You might find it at a bookstore. Or order it at (866) 608-9570.