1min snip

INSIGHT

Most Stocks Underperform

Stocks are considered a risky asset class, so a positive average return is expected.
However, research using the CRISP database since 1926 revealed that the majority of individual stocks (four out of seven) do not outperform treasury bills.
This challenges the traditional understanding of risk-return trade-offs in the stock market.
The average return of all stocks is positive, but the return on a typical stock is not.
This highlights the importance of considering the distribution of returns, not just the average when evaluating investment strategies.

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