Few stocks carry the market
Hendrik Bessembinder studied how the returns of the US stock market were spread over individual stocks. He measured the return over each stock's whole listed life, with dividends reinvested, against one-month US Treasury bills.
The finding describes the past. It does not say which stocks will be ahead in future, it shows how unevenly returns on the stock market have been spread.
Over their listed life most US stocks fell short of Treasury bills, and a small group carried the whole gain of the market.
Questions people ask
Do most stocks earn more than short-term government paper?
Not over their whole listed life. In Hendrik Bessembinder's study most US stocks fell short of one-month US Treasury bills.
Why does the stock market rise when most stocks fall behind?
Because a few companies grew enormously. Their gains carry the whole rise of the market, while the others together only matched Treasury bills.
What is a US Treasury bill?
A very short-term security of the American state, here with a term of one month. It serves as the yardstick for a return with almost no swings.
All US stocks of the study as one field, split by what they earned over their listed life.
The simulation, the comparison and the Beam stay free.
Education, not advice. Disclaimer