Crossed signals.

The financial markets have pulled off one surprise after another in the last year or so.

The stock market caught battalions of bears off guard by staging a rally that brought back memories of the 1990s. Mutual funds shocked friend and foe alike with scandals over trading and sales practices. Then mutual-fund investors sprang a surprise of their own, stepping up their buying despite all the headlines.

Bond funds also came up with an unexpected feat. At a time when Treasury bonds were widely dismissed as overpriced and due for a setback, government and agency bond funds have posted a 5 percent return over the past year.

That's pretty close to their five-year average annual payoff of 5.6 percent.

Very few people had any of these developments scoped out ahead of time. With all the imponderables, the past year wasn't so unusual.

Events that move markets are, by definition, always surprises. The expected can't do that, because everything that can be anticipated at any given time is bound to be factored into the price of a security or a market index.

Every investor knows this intuitively. And yet we continue to pore solemnly over analyses of what the next 12 months will be like, and to plan as though we have some sort of handle on the future.

"At the beginning of every year, investors always think the market's going to be up 10 percent," Byron Wien, senior investment strategist for Morgan Stanley, told a recent meeting of the firm's clients.

"If it were up 35 percent last year, they would be more conservative, thinking it would be up 10 percent. If it were down 20 percent, they would think it would be up 10 percent. It's always 10 percent."

While it may be perfectly natural to expect any given year to be typical, typical is rarely the way years turn out.

In the last 30 years, none of the yearly changes posted by the S&P 500 fell between plus 8 percent and plus 12 percent. The range extended from a 34.1 percent gain in 1995 to a 29.7 percent loss in 1974.

Just as with other statistical norms such as average life expectancy, chances are good that any number in a series will differ significantly from the average.

Whatever you do in retirement, don't construct your financial plan on the assumption that you will live as long as the figure in some actuarial table says. Count on your own experience to be either longer or shorter.

Individual deviation from the norm is why we have a huge industry to sell us life insurance and annuities. The companies collect a pretty penny for assuming our variational risk.

In the same vein, extreme variability from one year to the next is why stock market returns on average may be higher than the payoffs that more predictable investment vehicles have to offer.

Investors hope to get paid extra for being willing to live with surprises. They can't be sure they'll get that additional reward. What they can count on is that surprises will occur.