Research by Hendrik Bessembinder, professor and Francis J. and Mary B. Labriola Endowed Chair in Competitive Business at ASU’s W. P. Carey School of Business, evaluated lifetime returns to every U.S. common stock traded on the New York and American stock exchanges and the Nasdaq since 1926.
“The results also help to explain why active strategies, which tend to be poorly diversified, most often underperform,” says Bessembinder, who found that the largest returns come from very few stocks overall — just 86 stocks have accounted for $16 trillion in wealth creation, half of the stock market total, over the past 90 years. All of the wealth creation can be attributed to the thousand top-performing stocks, while the remaining 96 percent of stocks collectively matched one-month T-bills.
Bessembinder’s groundbreaking research has been covered extensively in major news outlets. He made available a spreadsheet containing lifetime stock market wealth creation data for each U.S. common stock since 1926, as well as the SAS computer program that generates the data, featured below.
Top 20 wealth creators from 1926 to 2017
If most stocks are underperforming, yet the market as a whole does well, the only way these two things can come together is that there are a few stocks doing really well that pull the whole market up. Click the infographic to see the the top 20 winning stocks.
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Link to Arizona State University, W. P. Carey School of Business, Department of Finance