Since 1926, Entire Market Gain Is Due To Four Percent Best Performers
Why do active managers underperform broad-based stock indexes? Hendrik Bessembinder of Arizona State thinks he might have the answer. The vast majority of stocks have failed to outperform T-Bills, he points out in a study. It is only a small percentage of stocks that lead indexes higher. On a statistical basis, selecting individual issues means the odds are stacked against the stock picker from the start.
When Bessembinder looks at the title . . .
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