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We Study Billionaires - The Investor’s Podcast Network cover image

TIP667: Why Most Stocks Will Lose You Money w/ Professor Hendrik Bessembinder

We Study Billionaires - The Investor’s Podcast Network

NOTE

Stocks Demand Caution: Majority Underperform

The relationship between risk and return in stock investments reveals that while stocks are generally considered risky assets with a positive average return, the reality shows that most individual stocks fail to deliver positive returns. An analysis of data from the Center for Research and Security Prices indicates that approximately four out of seven stocks do not outperform treasury bills, which are low-risk investments. This highlights the need to approach stock investment with caution, as the expected risk premium may not manifest for the majority of individual stocks.

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