Stock Market Concentrates Wealth Among Few
Finance professor Hendrik Bessembinder's updated research, covering roughly 29,000 U.S. stocks from 1926 through 2025, finds extreme concentration of long-term shareholder wealth. The study reports that as few as two companies account for 10% of net market wealth, median lifetime stock returns are negative (-6.9%), and under 4% of firms generated essentially all net U.S. stock market wealth. The findings favor broad diversification.
Key Points
- 1Finds extreme concentration: under 4% of firms produced essentially all net U.S. stock market wealth
- 2Shows increasing skew: updated 1926–2025 data report two firms accounting for 10% net wealth
- 3Recommends investors favor low-cost, globally diversified passive ETFs over active stock picking and mutual funds
Scoring Rationale
Strong empirical update demonstrating extreme concentration in stock-market wealth, but limited methodological detail and narrow investor-focus reduce broader impact.
Sources
Public references used for this report.
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