Despite the financial crisis, equities are still the best bet for a long-term retirement savings policy, according to T. Rowe Price, which has produced a recent study to give advisors more ammunition to convince clients.

Savers are fleeing risk for more stable investments, according to the Investment Company Institute. Net outflow from equity mutual funds was $270 billion between October 2007 and September 2010, ICI says, and the fear of risk crosses age groups.

Between 1998 and 2001, willingness to take substantial risk peaked at 30% for investors under 35 years old, the ICI says. Risk was more attractive in those years even for people from 50 to 64, but it has declined in every age group since then. Those willing to take substantial risk decreased by September 2010 for young investors to 24% and for the near retirees to 19% from 24% at the start of the decade.

However, T. Rowe Price says its recent study for three age groups of retirement savers shows the value of equities when part of an age-appropriate diversified portfolio, even given the relative risks of down stock markets.

The study was based on all 30-, 20- and 10-year periods from 1950 through the end of 2009. It looked at the results for investors in an asset allocation "glide path" that began at age 35 with 90% in stocks and 10% in bonds, reduced its exposure to stocks every year, and ended at age 65 with 55% stocks and 45% bonds.

Investors in this glide path beat inflation over every one of the 31 30-year and 41 20-year periods studied. Investors also beat inflation in 80% of the 51 10-year periods studied.

Thirty-five year olds, invested for 30 years, had a median annual return of 10% with the worst 30-year period registering an 8.9% annual return.

Forty-five year olds, invested for 20 years, had a median annual return of 9.8% with the worst 20-year period registering 6.4%

Fifty-five year olds, invested for 10 years, also had a median annual return of 9.8% with the worst 10-year period registering 1.9%.

This positive, long-term performance for stocks within a diversified portfolio is sometimes overlooked when stocks are declining.

"There is a lot of anecdotal evidence that makes some people think all the market does is fall 37% a year, but that is an example of the most recent events influencing them," says Stuart Ritter, T. Rowe Price vice president and CFP. "I would never advise anyone to change the way they invest on the basis of 2008's 37% decline nor advise them to change the way they invest based in the two years the market went up since then.

"This study gives advisors a more concrete way to show clients they should not react to what the market has done in the last 18 months."

The key thing, Ritter says, is to create a plan that clients can stick with. "If you are holding stocks," he says, "you have a goal, you have something to build on over a number of years."