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A: When I wrote on Jan. 12, 2006 that large-company stocks, on average, return 10% a year, you wouldn't believe the hate mail I received.

I was called everything from clueless to naïve. Most of the skeptics listed all sorts of problems facing the economy, from a weak dollar to high oil prices, a weakening housing market and a slowing economy.

One young reader was so sure stocks would return less than 5% that he took an inheritance he could have invested in stocks to pay down his low-cost 4.5% mortgage instead. You can read the column that sparked the controversy here.

Today, I can say, I told you so! Regular Ask Matt readers know I don't say that often, but given the beating I took, I can't resist.

Despite all the problems listed above, stocks did even better than average in 2006. The Standard & Poor's 500 stock index, which is heavily weighted with large-company stocks, gained a robust 15.8% in 2006, says Ibbotson.

Other areas of the stock market, which should be part of a diversified portfolio, did even better. Small-company stocks, measured by Ibbotson, returned 16.2%. Cash, on the other hand, generated just a 4.8% return.

I bring this up to prove a point: Don't think you can time the market and be consistently right. Sure, there may be serious problems facing our economy. But investors know this, and those assumptions are figured into the price of stocks pretty quickly. Going forward, stocks react to what is now unknown and unforeseen. What we do know, however, is that the risk of capitalism and free enterprise generates, on average, a return of 10% a year.

It's important to remember that this doesn't mean the stock market returns exactly 10% a year, every year. It's actually unusual for the market to return exactly 10% in a given year. The S&P 500 has only posted a return of between 10.0% and 10.9% four times since 1926 and only returned exactly 10% once, in 1966, according to S&P data that includes dividends.

Stock returns are wild and unpredictable. Since 1927, the S&P 500 stock index has gained 10.4% a year on average. But in any given year it could be up 29.9% or down 9.0% or somewhere in between, says IFA.com.

The trick is understanding that risk is a fact of investing. And it's also knowing you can manage risk intelligently by deciding how much risk you want to take and tailoring your portfolio to generate the top return for your level of acceptable risk.

To do that, it's important to understand the power of diversification and the benefits of owning many types of stocks, from large value-priced stocks to small value-priced stocks. Diversification lets you minimize the risk posed by a single stock or type of stock and lets you still get your share of the market's return.

You must also understand that to claim your 10% return, you need to be invested for a number of years and ignore short-term stock movements.

Learn these things now and stop worrying about everything else. Then, maybe the next time stocks jump 15.8% you'll cash in, rather than be sitting on the sidelines reciting reasons why it won't happen.

Matt Krantz is a financial markets reporter at USATODAY. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com.