10%! A great annual return!

Anyone who tells you that in today's world a 10% annual return isn't enough doesn't know history. There was a time when the S&P 500 could deliver average annual gains like this because the economy was growing at more than 3%, inflation often topped these levels and interest rates were above 5%. But that's not where we are now.

I'm "burying the lead" here but please bear with me. When you can register a double digit market gain for the year under these conditions you're doing great. Our economy isn't in bad shape, just growing closer to 2%. Inflation is modest, also hovering around this level. And interest rates remain at historical lows.

So here's the lead: if you bought the Vanguard S&P 500 Stock Index Fund at the beginning of the year you are now up 10%. Let me say it again, you've logged a good year's gain before you've reached the half year mark. Now what?

You could hope we have even greater returns by year end and stay put; you could run for the exits and sell to realize your gains; or you could take a long-term perspective, my preferred strategy.

I don't know how the market will do for the remainder of the year. Personally, I hope it goes sideways since this will provide time for earnings to catch up with share prices. We could have a correction -- it's been awhile since the last one. Or we could rise to new heights. Whatever the result, equities are a long-term game. Cashing out now will create a much bigger dilemma: what will it take you to get back in?