What to watch

Should stock investors pocket gains and run?

It has been a good year for large-company U.S. stocks.

So good, in fact, investors could exit the market now and still pocket gains that are bigger than the average historical gains for an entire year.

The Standard & Poor’s 500 stock index is up 10.6% so far this year. And that is a bigger return than the average gain of 8.9% since 1950, according to LPL Financial, citing FactSet data.

But despite the use of “average” gains to compare and contrast stock market performance over time, the stock market — which tends to either run away to the upside or careen to the downside — rarely finishes any calen- dar year with its average long-term gain. In fact, from 1928 to 2016, the S&P 500 finished a year with positive returns of 5% to 10% only six times, according to an analysis by LPL Financial.

What’s interesting is the data show it is more likely for the market to shoot up more than 20% in a year (which occurred 27% of the time) or fall more than 20% (a scary-sized drop that happened 21.3% of the time).

The analysis confirms what Wall Street has been telling investors forever: that the stock market goes up more than it goes down. Since 1928, the S&P 500 has finished up two-thirds of the time (66.3%) and has finished down 33.7% of the time.

The often-cited average annual gain of around 9% makes the market look like a predictable beast. The reality is its performance is difficult to predict.