A large-scale study covering nearly a century of the U.S. stock market history debunks the myth that buying stocks is a guaranteed path to long-term wealth. The data shows that the vast majority of U.S. public companies failed to provide investors with returns comparable even to the most conservative instruments.
I analyzed a study based on the CRSP database from the University of Chicago, which covers 29,754 companies traded on the NYSE, AMEX, and Nasdaq between 1926 and 2025. The findings are striking: only 1,082 firms (about 3.7% of the total) generated all the net wealth of the stock market during this period. The returns of the remaining 96% of stocks were, on average, lower than those of short-term U.S. Treasury bills (T-bills), which are traditionally considered the benchmark for a risk-free asset.
Averages here are deceptive. Looking at the median, half of all stocks depreciated by 6.9% over their history. The overall average exceeds 30,000%, but this is due to just a few giants that "pulled" all the statistics upward. This situation, known as "extremely narrow market breadth," has only worsened over time.
Capital Concentration in the Hands of a Few
Five companies accounted for more than one-fifth of all the wealth created by the market since 1926. Topping the list is Apple with $5.02 trillion (about 5.5% of the total), followed by Nvidia with $4.58 trillion. The top five also include Microsoft, Alphabet, and Amazon. All are part of the so-called "Magnificent Seven," which account for a colossal 24.2% of the total accumulated market capitalization.
The speed of change is staggering. Nvidia had its initial public offering only in 1999, and today, together with Apple, it controls a tenth of all accumulated wealth. This concentration of assets has sparked renewed discussions about a potential "bubble" in the technology sector. Even shares of Nvidia's suppliers in the micro-cap category have joined the rally, only heightening the nervousness.
Comparing the 2018 study data with current figures demonstrates accelerating consolidation. Nine years ago, half of the market's net wealth came from the stocks of 89 companies. Today, a similar volume of funds is concentrated in the hands of just 46 corporations, even as the total market capitalization has grown from $43 trillion to $91 trillion.
Cryptalist's Comment: This statistic is a powerful argument in favor of passive index investing for retail players. Attempts to "beat the market" by picking individual stocks are statistically doomed to fail. However, for crypto investors, there is a flip side to this coin: if the traditional market relies on the hyper-concentration of capital in a few stocks, then any systemic shock in Big Tech could trigger a cascading sell-off that affects everyone. Diversification across asset classes, including digital ones, becomes not just a strategy but a necessity.