Advocates of buy-and-hold index investing have a fresh batch of powerful evidence supporting the wisdom of their ways, new research shows.
Not only do the majority of stocks deliver long-term underperformance vs. pretty much the least risky asset you can find, but the great bulk of equity-market wealth is created by just a tiny percentage of the very best stocks.
A study of the performance of more than 64,000 global stocks from January 1990 to December 2020 revealed that the compound returns of 55.2% of U.S. stocks, as well as 57.4% of non-U.S. stocks, underperformed essentially risk-free one-month U.S. Treasury bills. Moreover, the entirety of the $75.7 trillion in net global stock market wealth created over the past 30 years was…
