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Rekenthaler Report

How Many Stocks Beat the Indexes?

Unlike the children of Lake Wobegon, most companies are below average.

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The Challenge

In 2018, the Journal of Financial Economics published the provocatively titled paper, “Do Stocks Outperform Treasury Bills?”, by Arizona State’s Hendrik Bessembinder. His answer: “Yes and No.” Of course, the U.S. stock-market indexes had outgained cash; any Vanguard 500 Index (VFINX) shareholder could tell you that. But those gains owed largely to relatively few winners.

John Rekenthaler does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.