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If you were picking equities by throwing darts at a board, more than 90% would fail to beat cash, according to Professor of Finance Hank Bessembinder's research.

Research by Professor of Finance Hendrik Bessembinder evaluated lifetime returns to every U.S. common stock traded on the New York and American stock exchanges and the Nasdaq since 1926. He says the results help to explain why active strategies, which tend to be poorly diversified, most often underperform. This groundbreaking research has been covered extensively in major news outlets.

In this story published Dec. 8, 2019, on Bloomberg Opinion:

For the U.S., Bessembinder and his colleagues looked at how many stocks have beaten T-bills over their lifetime, starting in 1926. They found that four out of every seven common stocks in the Chicago Center for Research in Securities Prices database since 1926 have lifetime buy-and-hold returns less than one-month Treasuries. Put differently, the best-performing 4% of listed companies explained the entire net gain of the U.S. stock market since 1926. All the others between them did no more than match T-bills.

– Hendrik Bessembinder, who is the Francis J. and Mary B. Labriola Endowed Chair in Competitive Business