From 1926 through 2025, just 27.6% of stocks beat the broader market. Nearly 60% actually destroyed shareholder wealth, and the median stock delivered a lifetime return of -6.9%. Yet despite those sobering odds, U.S. stocks collectively created roughly $91 trillion in wealth over the last century, with just 46 companies responsible for half of it.
Bessembinder analyzed 29,754 publicly traded U.S. stocks between 1926 and 2025. Over that period, the overall stock market produced an annualized return of about 10.1%, turning every dollar invested into more than $15,000, according to the study, detailed in this white paper.
the median stock lost 6.9% over its lifetime, fewer than half of all stocks generated a positive lifetime return, only about 41% outperformed Treasury bills during the time they were publicly traded, and just 27.6% managed to outperform the market itself.
Thanks for the link. It seems that high returns are concentrated in the winners. Not a surprise, really.
My takeaway, rather than index investing, is to focus on the stocks showing momentum. The momentum factor was explored by Jegadeesh and Titman back in 1993 and has been confirmed by many studies since. Of course, today there are even ETFs that focus on stocks with recent momentum such as MTUM and SPMO. (SPMO is up 153% in the last five years versus SPY at 72%).
Well the magnificent 7 stock has fueled the stock market.
Just as the dot.com stocks fuel the stockmarket in the early 2000 until they imploded.
MTUM & SPMO are 50% tech stocks.
I have been riding the magnificent 7 via VGT until this spring. Due to the stock market valuation I sold off VGT & readjusted my portfolio more toward international stock & value stocks. I’ve been building more cash hoping to back up the truck when this bubble blows.
Today Morningstar has an article about momentum. https://www.morningstar.com/stocks/momentum-investors-are-winning-not-by-betting-quality Momentum can be a powerful force in investing. That’s the first thing that pops to mind when looking at the quilt chart below for the Morningstar Factor Indexes, which shows momentum winning in six of the last 10 quarters, including the second quarter of 2026. From April through June, the broad US stock market rebounded from a rough start to the year and gained more than 15%. Investors betting on smaller-sized US companies fared even better, but not as well as those riding the momentum wave.
What’s also interesting is that the quality factor has lagged. That wasn’t just true in the second quarter of 2026. The shares of super-profitable companies with strong balance sheets haven’t beaten the market since the second quarter of 2025. The market’s momentum used to be in quality stocks. But performance dynamics have shifted, with important implications for investors.
Second-quarter momentum belonged to artificial intelligence stocks. Improbably, several companies joined the “triple-digit club,” meaning their stock prices appreciated by 100%, 200%, or even 300% in just a few months. The 10 biggest contributors to the Morningstar US Momentum Factor Index include semiconductor businesses like Micron MU, AMD AMD, and Lam Research LRCX, memory providers like Western Digital WDC and Seagate Technology STX, and data center supplier Bloom Energy BE. All benefited from a flood of corporate spending on artificial intelligence.
Many of its recent winners are suppliers of “picks and shovels” to the AI gold rush. Stocks across the market capitalization spectrum are benefiting.
What if AI turns out to be the dot.com of 2026?
I am 75, so I no longer swing for the fences.
You play your bets & hope for the best.
I’m ahead of you by three years so have lots of cash/money markets in various accounts. At the same time I’ve done well over the last three decades with plenty of momentum stocks/strategies.
I used to spend a lot of time on the Mechanical Investing board. A couple of strategies that are easy to implement with a portion of your funds:
Each month sort the Naz 100 stocks by 1-year return. Buy the top five or ten, hold for one month. Rinse and repeat. Low turnover.
Each month find the industry with the highest one-month return, for example, Restaurants. Buy the five stocks in that industry with the lowest one-month returns and hold for one-month High turnover, so best done in an IRA.
So he probably found a ton that have gone to zero. According to a report from McKinsey, the average public company in 1958 lasted for 60 years. Today it is 20 years. (That seems short to me, I’m just repeating what they said.)
So yeah, lots of losers - which is not the same thing as saying “most” stocks go down. They ALL go down. Eventually.
Blockbuster Stock Sales Are Threatening to Overwhelm the Bull Market
Companies’ race to issue shares reminds some analysts of later stages of prior rallies
The rush for cash by some of the world’s largest companies is putting the long bull market at risk.
Investors have been cheering the raging bull market for years—three years and nine months, to be precise—with the S&P 500 having more than doubled during that period. Now companies are racing to take advantage, raising concern that the party could be coming to an end.
Markets don’t collapse because of old age. Even high prices aren’t usually enough alone to cripple a bull. But one way stocks can slow is when new issuance overwhelms investors, as supply outstrips demand. Companies raced to sell shares in late 1999 and the first half of 2000, for example, which some believe contributed to the dot-com collapse.
“Stock issuance tends to surge in the late stages of a bull market,” says Rob Arnott, chair of Research Affiliates.
And fewer companies are buying back shares, another way the overall supply of shares is swelling.
A surge of share sales doesn’t guarantee a stock slump, of course.
Another straw on the camel’s back? Or just blathering from WSJ?
I think one reason indexing is the way to go is finding the few winners really can be hard (witness what happened to IBM this week!). (Or Lucid, but one can argue Lucid has always been on borrowed time, no matter how great their cars are). So you own a ton of losers, but all the winners, and it works out in the end, with little effort. Let’s face is, most people cannot devote the time to finding “winners” like people on this (relatively small) forum can and do. And that’s fine. It’s normal.
Depends on supply and demand. When there is no demand markets collapse. Demand collapses when investors have no money or no faith. But the important thing is for our stocks to bounce back, to avoid bankruptcy and for us to have staying power.
