Most Stocks Don't Beat Cash. What 100 Years of Data Mean for Your Concentrated Stock Position.

If a single stock has grown into most of your net worth, you've probably felt the tension. The position got you here, and it might also be the largest unhedged risk in your life. A century of market data has something useful to say about whether holding it is the bet you think it is.

We put the research into a short video. It runs about three and a half minutes.

What the study found

Professor Hendrik Bessembinder studied nearly 30,000 US stocks from 1926 to 2025. The findings:

• Over 100 years (1926–2025), 29,754 US stocks created $91 trillion in shareholder wealth above what one-month Treasury bills would have returned.
• Yet the typical stock lost money: median lifetime buy-and-hold return −6.9%, and only 48.2% of stocks produced a positive return at all.
• Against cash, only 41.2% of stocks earned a positive risk premium over one-month Treasury bills. Only 27.6% beat the market.
• Just 46 firms created half of the $91T, and 1,082 firms (3.7%) account for all of it. The remaining 96.3% collectively matched Treasury bills — their winners and losers cancel out. (40.9% of firms did create positive wealth; the 59.1% that destroyed it wiped out an equal amount.)
• It's concentrating: firms behind half the wealth fell from 89 (through 2016) to 46 (through 2025); in the last nine years alone, 30 firms drove 61% of the $48.4 trillion created in that period.
• The winners rotate. 19 of the top 30 wealth-creators from 2017–2025 don't appear on the list through 2016 (Nvidia, Tesla, Meta, Eli Lilly, AbbVie, Micron, AMD, Cisco).

What it means if you hold a concentrated position

Most stocks do not beat the market. It climbs because a tiny group of winners carries the average, while the typical stock goes nowhere. Holding a single position is a concentrated bet that yours is one of the few, and the base rates say it probably isn't. Being right while concentrated feels great. Being wrong while concentrated can undo decades of saving.

You can believe in your company and still not want your financial plan to hinge on being the statistical exception, especially once one position is large enough that a bad year changes your life rather than your quarter.

Read the research

Bessembinder's paper is public, and it's worth reading in full. Read "One Hundred Years in the U.S. Stock Markets" on SSRN →

Diversifying a concentrated position without selling

The usual ways to cut single-stock risk each carry a cost. Selling can trigger a capital gains bill that can sometimes take  years to recover from. Holding keeps all of the risk.

An exchange fund is a third path: you contribute your shares alongside other concentrated holders and receive a diversified portfolio in return, benchmarked to a major index. Because it's a contribution rather than a sale, it's designed to defer the capital gains you'd otherwise realize. The trade-off is the commitment: exchange funds require a seven-year holding period under current tax rules, so it's a long-term decision, not a liquidity tool.

See what diversifying your position could look like →