Research from Arizona State University reveals that a staggering 96.3% of US stocks have failed to generate lasting wealth over the last century. The study, which analyzed 29,754 companies from 1926 to 2025, indicates that only 1,082 firms produced the majority of market gains. For the remaining stocks, the performance was on par with Treasury bills, which are considered a safer investment.
The comprehensive paper titled “One Hundred Years in the U.S. Stock Markets” utilizes the University of Chicago’s CRSP database, encompassing every stock listed on the New York and American exchanges as well as Nasdaq since 1926. Finance professor Hendrik Bessembinder, who authored the study, previously highlighted in 2018 how a mere fraction of stocks drive market performance.
Performance of Stocks versus Treasury Bills
Through the years, nearly 60% of stocks failed to surpass the returns from Treasury bills, with only 41% of stocks performing better. Notably, the median stock experienced a loss of 6.9% over its lifetime, while the average gain was skewed upwards, exceeding 30,000%, driven largely by a handful of outstanding performers.
Five companies alone contributed to over 20% of total wealth generated in the stock market since 1926. Apple leads with a remarkable market value of $5.02 trillion, followed by Nvidia at $4.58 trillion. Other significant players include Microsoft, Alphabet, and Amazon. These firms form part of the so-called Magnificent Seven, which collectively accounted for 24.2% of wealth production in the past century. Some analysts have raised concerns regarding potential market fluctuations linked to this heavy concentration of wealth.
Interestingly, Nvidia, which went public in 1999, alongside Apple, now represents about 10% of all wealth ever created. This trend helps explain why semiconductor stocks have historically outperformed both traditional tech stocks and cryptocurrencies in recent years.
The ongoing concentration in market wealth is evident. An earlier study noted that just 89 firms contributed to half of all net wealth in 2016; today, this number has dwindled to 46. This contraction in the number of wealth creators coincides with the rise of Big Tech and the AI boom, as total market wealth surged from $43 trillion to $91 trillion in the same period.
This material is for informational purposes only and does not constitute financial advice.
