2026 MIC – Hank Bessembinder’s 100-Year Study Shows Most Stocks Don’t Even Beat Cash

At the 2026 Morningstar Investment Conference, Hendrik “Hank” Bessembinder, the Francis J. and Mary B. Labriola Endowed Chair in Competitive Business at Arizona State University, brought a century of data to a deceptively simple question: do stocks actually outperform cash? In conversation with Morningstar’s Dan Lefkovitz, an index strategist, and Alex Poukchanski, the firm’s director of index analytics, Bessembinder walked through an update to the research that made him famous, now extended to a full 100 years of U.S. market history. His answer unsettles a lot of conventional intuition. The stock market as a whole has been a phenomenal wealth machine, but the typical individual stock has not. Most have failed to beat one-month Treasury bills over their lifetimes, and the market’s entire gain traces back to a vanishingly small number of companies.

A Century of Data, and a Negative Median

Bessembinder’s update covers 29,754 common stocks issued by 29,081 firms in the CRSP database from January 1926 through December 2025. The headline figures capture the paradox at the heart of his work. The average buy-and-hold return across all those stocks is a spectacular 30,621%. The median is negative 6.87%. That gap exists because returns compound, and compounding turns a distribution of outcomes sharply positive-skewed: a handful of stocks return thousands of percent and drag the average up, while the typical stock does nothing of the sort.

Put differently, only 48.22% of stocks delivered a positive buy-and-hold return over their lifetimes. When Bessembinder compared each stock against the return on Treasury bills over the exact same months it was listed, only 41.17% cleared that low bar. And measured against the value-weighted market, just 27.6% of stocks kept pace. Half of all stocks did worse than negative 7% over their entire listed life. The premium that investors associate with equities, in other words, is real in aggregate but is driven by relatively few names.