For generations, investing has rested on a reassuring assumption: Buy a diversified basket of stocks, stay invested for the long term, and economic growth will eventually reward patient shareholders.
A sweeping new analysis of a century of US stock market history suggests the reality is far less democratic.
The study finds that almost every dollar of long-term shareholder wealth has been generated by a tiny elite of companies, while the overwhelming majority of listed firms have failed to outperform even the safest government securities.
The findings come from Hendrik Bessembinder, finance professor at Arizona State University’s WP Carey School of Business, whose updated research, ‘One Hundred Years in the US Stock Markets’, examines the performance of 29,754 common stocks listed between January 1926 and December 2025.
The headline number is startling. Collectively, US equities created almost USD 91 trillion in shareholder wealth over the century. Yet, more than 96% of listed companies contributed nothing to that total after accounting for returns available from one-month Treasury bills.
Instead, the entire market’s long-term wealth creation came from just 1,082 companies, representing only 3.72% of all firms that went public during the period.
Why average returns can be misleading
The research highlights one of investing’s biggest statistical traps: The difference between the average stock and the typical stock.
The US stock market as a whole produced an annualised return of roughly 10.1%, turning every dollar invested in 1926 into more than USD 15,000 by the end of 2025.
But individual stocks tell a completely different story.
Although the average buy-and-hold return across all companies appears spectacular because of a handful of extraordinary winners, the median stock actually delivered a negative lifetime return of 6.87%.
Less than half of all listed companies generated positive lifetime returns. When measured against Treasury bills, only about 41% outperformed cash. Against the broader market itself, only 27.6% beat the benchmark.
In other words, most listed companies either underperformed the market, or failed to reward investors for taking equity risk.
Why the winners dominate
The explanation lies in what statisticians call positive skewness.
Individual stocks have a natural floor. Investors cannot lose more than 100% of their capital.
But there is effectively no ceiling on gains.
A failed company can fall to zero. A successful one can rise thousands – or even millions – of per cent over decades.
That asymmetry means a handful of extraordinary performers pull the market’s average sharply upward while the majority of companies cluster around mediocre or disappointing outcomes.
It also explains why long-term market returns depend disproportionately on finding the rare businesses capable of compounding for decades.
Measuring wealth rather than percentages
Rather than looking only at percentage returns, Bessembinder measures what he calls Shareholder Wealth Creation (SWC).
The metric estimates the total dollar wealth generated for shareholders after accounting for dividends, share buybacks, equity issuance and other corporate actions, while comparing returns with the risk-free Treasury bill benchmark.
Unlike percentage gains, SWC reflects corporate size.
A modest gain in a trillion-dollar company creates vastly more wealth than a spectacular rally in a tiny micro-cap stock.
Viewed this way, the concentration becomes even more striking.
The bottom 17,197 companies, representing almost 60% of all firms, collectively destroyed USD 10.67 trillion of shareholder wealth relative to Treasury bills.
The next 10,802 companies generated almost exactly enough wealth to offset those losses.
That means the first 27,999 companies – more than 96% of the entire sample –collectively produced zero net wealth above cash.
Everything investors gained over the century came from the remaining 1,082 companies.
Technology has rewritten market history
The updated study also reveals how dramatically the balance of corporate power has shifted in less than a decade.
When Bessembinder first published his landmark work in 2018, Exxon Mobil ranked as history’s greatest creator of shareholder wealth, alongside industrial giants such as General Electric, IBM, Johnson & Johnson, General Motors, and Walmart.
Only Apple and Microsoft represented the modern technology sector in the top 10.
That hierarchy has now been transformed.
Apple has become the greatest wealth creator in the history of public markets, generating roughly USD 5.02 trillion in lifetime shareholder wealth – more than 5.5% of all wealth created across the US stock market over the past century.
Close behind is Nvidia, whose rise has been even more remarkable.
Listed only since 1999, Nvidia has generated around $4.58 trillion in shareholder wealth, despite having a much shorter public history than most companies near the top of the rankings.
Even more striking is the timing.
Almost all of Nvidia’s lifetime wealth – about USD 4.51 trillion – was created between 2017 and 2025, underscoring how rapidly today’s technology leaders can reshape the market.
Tesla provides another example.
Absent from the historical leaderboard in the earlier study, it now ranks among the top 10 wealth creators of all time after generating roughly USD 1.3 trillion in shareholder wealth.
The research also notes the extraordinary debut of SpaceX, whose public listing briefly propelled it into the top 30 wealth creators almost immediately, highlighting how quickly modern technology firms can alter decades of accumulated market history.
Market concentration is accelerating
Perhaps the study’s most important finding is that wealth concentration is becoming even more extreme.
In the original research covering 1926 to 2016, the five biggest wealth creators together accounted for the first 10% of all shareholder wealth.
In the updated study, Apple and Nvidia alone now account for that same threshold.
The top 10 companies generated 17.1% of all historical wealth in the earlier dataset.
Today, they account for 29%.
The top 30 companies’ share has risen from roughly 31% to nearly 44%.
Perhaps most remarkably, it once required 89 companies to generate half of all shareholder wealth created across US market history.
Now, just 46 companies account for half of the century’s total.
What it means for investors
The findings reinforce one of the strongest arguments in favour of broad-based index investing.
Since virtually all long-term wealth creation comes from a tiny fraction of companies, investors attempting to pick individual stocks face difficult odds.
Missing just a handful of exceptional performers can leave a portfolio significantly behind the broader market over time.
Owning an index fund ensures investors automatically hold tomorrow’s rare winners, even if nobody can identify them in advance.
Yet, the research also exposes a new challenge.
As market-capitalisation-weighted indices become increasingly dominated by technology giants, diversification itself becomes more complicated.
Buying the entire market no longer means owning an evenly balanced cross-section of the economy.
Instead, investors are making an increasingly concentrated allocation to a relatively small group of companies involved in semiconductors, artificial intelligence, cloud computing and digital platforms.
Whether artificial intelligence (AI) further entrenches these dominant firms – or creates the next generation of disruptive challengers – may determine whether the market’s concentration intensifies or begins to broaden over the decades ahead.
For now, the century-long evidence points to a sobering conclusion.
Stock markets have created enormous wealth. But history suggests that wealth has not been built by thousands of successful companies rising together. It has been driven by a remarkably small group of exceptional businesses whose compounding power has carried almost everyone else.