For the past two months if you asked most investors what they feared most, they would have said the economic impact caused by political infighting.

And why wouldn’t they? During a government shutdown, small businesses can’t apply for loans to expand. Clinical drug trials are put on hold. New oil and gas drilling permits don’t get approved. And both consumers and companies are reluctant to spend in periods of economic uncertainty.#-ad_banner-#

Before Congress arrived at a last-minute deal, the impact of Washington’s dysfunction concerned me. But as an investor, it didn’t scare me out of the market.

Maybe it’s because I’ve been investing for more than 30 years now. I’ve had money in the market through almost every conceivable economic and financial scenario — historically high and low interest rates, higher and lower tax rates, recessions and overheated economies.

What I’ve learned is that there are always ways to minimize losses and maximize gains when conditions change.

But there is one thing that does scare me: People aren’t investing for their retirement.

The annual Wells Fargo Retirement Survey of middle class Americans almost always makes me nervous. Here are some highlights from the 2012 survey…

— 30% of middle class Americans say they will need to work until at least the age of 80 to live comfortably in retirement.

— 70% of those surveyed weren’t confident that the stock market was a good place to invest for retirement.

— If given $5,000 to invest for retirement, 40% of those surveyed said they would invest in a CD or savings account while 22% said they would invest it in gold or precious metals.

While savings accounts are safe, your money doesn’t go very far. Hard assets like gold may be good to hold when the market panics, but even these safe havens can lose value. Look how $5,000 fares invested in some of these popular methods when compared with my Daily Paycheck strategy…

In the chart above, you can see that those who chose a savings account would have made little progress toward their retirement savings plan. That’s because the average savings account rate in October 2012 was 0.12%. The ten-year Treasury only yielded 1.86%.

Gold is generally a good asset class to own in times of uncertainty. And many financial advisors recommend holding some portion of your portfolio in hard assets for diversification. Investors who dedicated all their investable funds in gold over the past year lost 24.5%.

But it turns out that even a conservative income portfolio — with the benefit of compound growth through dividend reinvestment like what I use in my Daily Paycheck advisory– would have been a much better retirement savings ally…

All investments are risky. But by choosing wisely from a diverse range of income-generating assets, investors can create a portfolio that has the ability to outperform the broader market — with much less volatility.

For instance, August 2011 was a terrible month in the market after the last debt-ceiling debacle; in those 30 days, the S&P 500 lost 6%. It was the kind of month that discouraged even the most steadfast investors. But my subscribers and I slept better than most; The Daily Paycheck portfolio was down just 1%, buffered by the 35 dividend checks I received that month.

Granted, my portfolio isn’t always that resilient. But on average, it is 40% less volatile than the overall market — which might be another reason why politicians can’t scare me out of the market.

I understand why people are reluctant to invest their retirement money in the market. Unfortunately, too many people think a savings account is a more secure path to retirement. And it scares me to think someone’s retirement dream may never become a reality.

Note: Have you heard of “Hidden-High yielders?” These are high-yield stocks that most people think sport small yields… That’s a mistake investors are starting to catch on to. I’ve already alerted readers of my premium newsletter, The Daily Paycheck, to this “glitch,” — and I don’t think the secret will last for long. I urge you to check out our brand-new report on these “Hidden High-Yielders” before more people find out about them.