economy
46 firms accounted for half the wealth generated by the stock market over the past 100 years, researchers say
Research shows that a relatively small number of stocks have historically driven markets, but that doesn't mean you should try to pick winners, experts say.
TL;DR
- A study of nearly 30,000 stocks from 1926 to 2025 found that just 46 firms accounted for half of the wealth created in the stock market.
- While the broad stock market generated substantial wealth, the median stock experienced negative returns, and only 27.6% of individual stocks outperformed the market.
- Professional fund managers also struggle to consistently beat market indexes, with a majority failing to do so year after year.
- Experts advise that for most retail investors, long-term participation in a broadly diversified, passively managed stock portfolio is the most prudent strategy for building wealth and avoiding significant losses.
- Historically, a value-weighted portfolio of all common stocks produced significantly higher returns than U.S. Treasurys over the 100-year sample period.