"Out of roughly $43 trillion in net wealth creation from 1926 to 2016, just 89 stocks were responsible for all of it. Extend that dataset through 2025, and it becomes even more concentrated. Roughly half of the $91 trillion in total wealth creation came from just 46 companies."
"If you instead buy a market-cap-weighted index fund, you are almost guaranteed to own those winners as they grow and take up a larger share of the market. You do not need to predict them ahead of time."
"SCHB is a passive ETF that tracks the Dow Jones U.S. Broad Market Index. It is designed to represent the bulk of the investable U.S. equity market, covering approximately 2,500 publicly traded companies across large, mid, and small-cap segments."
A study by Hendrik Bessembinder analyzes investment outcomes for over 229,000 stocks from 1926 to 2025. It reveals that just 89 stocks accounted for all net wealth creation from 1926 to 2016, and by 2025, 46 companies contributed to half of the $91 trillion in total wealth creation. This concentration of returns suggests that most investors should consider market-cap-weighted index funds, like the Schwab U.S. Broad Market ETF, to ensure they benefit from the growth of these successful companies without needing to predict them in advance.
Read at 24/7 Wall St.
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