80 Percent Of Stocks Have A Lifetime Return Of Zero

by Eric Crittenden, longboardfunds.com reposted with permission

Longboard’s original research proves that over the long term, a small minority of stocks drive returns for the overall market.

If you’ve heard of the Pareto Principle before, this might not surprise you.

What does this mean for investors? It may be more efficient to navigate this reality by getting defensive, and strategically avoiding the majority in this equation: the underperforming investments.

Be aware of disproportionate rewards

Here’s a closer look at our research on this competition gap in action in the U.S. stock market.

We analyzed 14,455 active stocks between 1989 and 2015, identifying the best performing stocks on both an annualized return and total return basis.

Looking at total returns of individual...