It's always baffling to me when people decide that investing the stock market is too big of risk. From my perspective, not investing in the stock market is easily a bigger risk than investing in it. After all, the stock market always goes up.
http://jlcollinsnh.com/2012/04/19/stocks-part-ii-the-market-always-goes-up/
I am not here to try to argue your premise, so much as to point out your argument is not convincing to those afraid of the market. Those who are not investing are not eternal optimists! Any number of items could be concerning them about investing! Just to be a devils advocate - let me throw some items out there which could be of real concern to "non investors".
I don't think that article referenced is going to reassure the risk averse. The stock market does NOT always go up. Take a look from 1928-1952, or perhaps 1966-1984. If your retirement / death horizon is in the next 20 years or so for those people, the market DID NOT GO UP. I appreciate that the market is the only place to hope to get some returns right now, but trying to argue that the market is not a big risk is a disservice. Sure the chances of those events lining up with your event horizon are not likely, and dollar cost averaging would mitigate that risk, but there is a very real possibility that those types of events can and will happen again in the future. Lets assume the worst - I am 47 and invest all my money in the market and it follows one of the bad historical trends and I make 0% for 24 years - do I want to wait until I am 71 to get any returns?
Go ahead and shoot holes in what I wrote, but for the seriously risk averse, you need to answer these real questions in their head before you can make what appears to be irrational statements not backed up by the facts (over a period of time which may be important to them - not everyone can wait for the mythical "long enough" that the "always goes up" crowd wants you to wait).
Also notice how many articles make special mention of ignoring certain periods of time! but don't go into any real detail why this or that period should be ignored.
Then you have the questions about other countries (Japan, etc) which really have not had the same types of historical charts as shown - they really have not always gone up.
Also - Does the risk averse believe that our country is going through fundamental changes? Look at the current news, our government is going through an unprecedented time of constitutional destruction (illegal spying, holding people without charges, not allowing people to congregate, the interference with free travel, destruction of freedom of speech (only politically correct speech is protected, other speech is "hate" speech, etc). We have large institutions which clearly manipulate the markets, never loose money, and if they do the government bails them out.
If they have these underlying fears then that could also be concerning them that the historical record is not relevant for the future!
My point here is that it is best to educate risk averse individuals about the possibilities, and then let them choose their coarse of action. If putting their money into the stock market is going to make them lie awake every night worrying, then it is a much better investment to put it into other areas.
If you are a glass is half full person then the stock market is full of promise, if you are a glass is half empty person then the stock market is poised for a crash of epic proportions at any time!