Brett Arends’s ROI: Most stocks end up losing you money. So what’s a stock-market investor to do?

by | May 21, 2023 | Stock Market

If you’re going to try to retire early and rich by picking the right stocks, there’s something you should know first: Most stocks end up losing you money.  Over the long term, a majority of stocks on the U.S. stock market have actually ended up as worse investments than keeping your money in low-risk 1-month Treasury bills. (Or savings accounts, or certificates of deposit.)

It’s easy to look at the fabulous wealth created by those who picked the big winners. We ignore at our peril all the losers. Going all the way back to 1926, it turns out that a stunning 59% — roughly three out of five — of all the stocks ever quoted on the U.S. stock market have made their investors poorer. Yes, the stock market overall has gone up phenomenally since then. But all of the gains have come from those other 40%, or two out of five. And even among those “winners” most of the gains have come from a very few. So reports Hendrik Bessembinder, a professor at Arizona State University’s W.P. Carey School of Business, in another of his landmark studies into stockholders’ returns. (His previous papers in the …

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