The SPDR S&P 500 (SPY) exchange-traded fund has provided a gain 80 percent of the time in the fourth quarter since it began trading 20 years ago. That performance indicates the broad stock market does well in the fourth quarter.

From an investment manager's perspective, the fourth quarter is different from the first three quarters. If a manager underperforms in the first three months of the year, they can shrug it off and focus on the remaining nine months. Six months of underperformance can still be overcome with a strong second half. After failing to beat the market for nine months, a manager is at risk of underperforming for the full year without a strong fourth-quarter performance.

Investment managers understand this problem from a personal perspective. While many earn generous salaries, they can often earn an annual bonus that is even larger than their salary for good performance. When their bonus is on the line in the fourth quarter, decisions might be made to maximize gains.

If managers are underperforming, they can increase their gains and bonus by swinging for the fences and investing aggressively in the final three months of the year. Idle cash will immediately be put to work in the market and that supports higher prices in the broad indexes.

Some managers might argue they would never base a decision on their bonus, but the data suggest otherwise. SPY produces a gain much more often in the fourth quarter than at any other time of the year. Investors could benefit from that trend by buying now.