In 2018, Hank Bessembinder, professor of business at Arizona State University, published a paper in the Journal of Financial Economics with the rather nonsensical question: Do stocks outperform Treasury bills? It seems nonsensical because, in the period from 1926 to 2016, the approximately 25300 companies listed on US stock exchanges, created $35 trillion in net wealth for its shareholders, in other words, $35 trillion more than what investors would have earned on US Treasury bills. But here is the catch: all of that net wealth was created by the top 1092 companies – or 4% of the total. In other words, the remaining 96% of listed companies ‘collectively generated lifetime dollar gains that matched gains on one-month Treasury bills’.
The future of the stock market
The future of the stock market
The future of the stock market
In 2018, Hank Bessembinder, professor of business at Arizona State University, published a paper in the Journal of Financial Economics with the rather nonsensical question: Do stocks outperform Treasury bills? It seems nonsensical because, in the period from 1926 to 2016, the approximately 25300 companies listed on US stock exchanges, created $35 trillion in net wealth for its shareholders, in other words, $35 trillion more than what investors would have earned on US Treasury bills. But here is the catch: all of that net wealth was created by the top 1092 companies – or 4% of the total. In other words, the remaining 96% of listed companies ‘collectively generated lifetime dollar gains that matched gains on one-month Treasury bills’.