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Do stocks outperform Treasury bills?

beebee
edited October 1 in Fund Discussions
A few, but most will not...It all about the mode...
HOW has the stock market returned 8-10% per year? — is a whole another question.

And the mode (i.e. the most common data point), rather than the average, tells that story. And answering HOW means looking at characteristics of individual stock performance through time.
Hendrik Bessembinder did that research. He has looked at the history of about 29,000 stocks in the United States, over the 90 years worth of good data we have for empirical stock analytics. He's also looked, on a slightly shorter time horizon because of available data, at about 64,000 stocks outside the U.S.

The mode is -100%.

The most common outcome from buying a stock is that you lose all your money.

Mind blown? Great. But read on, because it has implications for portfolio design, especially if you're a long-term investor.

just 86 stocks have accounted for $16 trillion in wealth creation, half of the stock market total, over the past 90 years.
do-stocks-outperform-treasury-bills

research paper

Study

Comments

  • edited October 1
    This is why VOO,VTI indexes have been recommended by Bogle and Buffett. It's a cap weighted index. No need to trade. All you got to do is add monthly for 3-4 decades and enjoy your retirement.
  • @bee The "Study" link doesn't appear to be functioning.
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