Why 95% of Investors Can’t Beat the S&P 500 (and What Actually Helps)
Charlie Munger put the odds at roughly 95% against. The data on professionals and individuals points the same way. The reasons are structural, and most of them can be fixed.
ResourcesInsight
How Many Stocks Beat the S&P 500 Over 10 Years?
We checked every one of today’s 500 largest US stocks against the S&P 500 over 1, 3, 5 and 10 years. Between 36% and 39% beat it, in every period. Here is the data, the stocks that did, and what the result means for building a portfolio.
Key takeaways
- About 36%. In Exent’s data, 152 of 422 of today’s largest US stocks with 10 years of history beat the S&P 500 over the 10 years to Sep 30, 2026. Survivorship bias means the true share is likely lower.
- The share is stable: 39.4% beat the index over 1 year, 37.3% over 3 years and 38.9% over 5 years.
- The typical stock trailed by a wide margin: the median 10-year total return was 239.2%, against 310.7% for the S&P 500 (SPY).
- Winners are rare and huge. Nvidia returned 13,575% over the decade; research by Hendrik Bessembinder found the best 4% of US companies explain the market’s entire net wealth creation since 1926.
- Risk-adjusted, the bar is higher still: only 94 of 468 large stocks (20%) beat the S&P 500’s Sharpe ratio over 5 years.
In this article
- How many stocks beat the S&P 500 over 10 years?
- What share of stocks beat the S&P 500 in each period?
- Which S&P 500 stocks beat the index over the last 10 years?
- Why do so few stocks beat the index?
- How many stocks beat the S&P 500 on a risk‑adjusted basis?
- Method and caveats
- What does this mean for my portfolio?
How many stocks beat the S&P 500 over 10 years?
About 36% of them. In Exent’s data, 152 of the 422 stocks that are among today’s 500 largest US companies and have a full 10-year history beat the S&P 500 index over the 10 years to Sep 30, 2026. The other 270 did worse than simply owning the index through the SPY fund, which returned 310.7% with dividends reinvested, or 15.2% a year.
The striking part is how stable the answer is. Over 1, 3, 5 and 10 years, between 36% and 39% of large stocks beat the index. Picking a single large US stock at random gave you a bit better than a one-in-three chance of beating the index, whatever the horizon.
What share of stocks beat the S&P 500 in each period?
| Period to Sep 30, 2026 | Stocks with data | Beat the S&P 500 | Share | Median stock total return | S&P 500 (SPY) total return | Lost money |
|---|---|---|---|---|---|---|
| 1 year | 477 | 188 | 39.4% | +4.7% | +15.1% | 195 |
| 3 years | 477 | 178 | 37.3% | +54.6% | +84.1% | 76 |
| 5 years | 468 | 182 | 38.9% | +60.6% | +89.1% | 94 |
| 10 years | 422 | 152 | 36.0% | +239.2% | +310.7% | 20 |
- 1 year
- Stocks with data
- 477
- Beat the S&P 500
- 188
- Share
- 39.4%
- Median stock total return
- +4.7%
- S&P 500 (SPY) total return
- +15.1%
- Lost money
- 195
- 3 years
- Stocks with data
- 477
- Beat the S&P 500
- 178
- Share
- 37.3%
- Median stock total return
- +54.6%
- S&P 500 (SPY) total return
- +84.1%
- Lost money
- 76
- 5 years
- Stocks with data
- 468
- Beat the S&P 500
- 182
- Share
- 38.9%
- Median stock total return
- +60.6%
- S&P 500 (SPY) total return
- +89.1%
- Lost money
- 94
- 10 years
- Stocks with data
- 422
- Beat the S&P 500
- 152
- Share
- 36.0%
- Median stock total return
- +239.2%
- S&P 500 (SPY) total return
- +310.7%
- Lost money
- 20
Two patterns stand out. The median stock trailed the index in every period, by about a fifth over 10 years. And losing money over a single year was common (195 of 477 stocks), while losing money over 10 years was rare (20 of 422). Time in a stock mostly protected against loss; it did not protect against trailing the index.
Which S&P 500 stocks beat the index over the last 10 years?
The biggest 10-year winners among today’s large US stocks were dominated by semiconductors and the hardware behind AI and data centers. These are past results over a specific window, listed for research, not as recommendations.
| Rank | Stock | 10-year total return | Annual return |
|---|---|---|---|
| 1 | NVIDIA (NVDA) | +13,575% | 63.5% |
| 2 | Advanced Micro Devices (AMD) | +8,753% | 56.6% |
| 3 | Micron Technology (MU) | +6,043% | 51.0% |
| 4 | Comfort Systems USA (FIX) | +5,891% | 50.6% |
| 5 | Dell Technologies (DELL) | +4,309% | 46.0% |
| 6 | Lam Research (LRCX) | +3,834% | 44.4% |
| 7 | Arista Networks (ANET) | +3,727% | 44.0% |
| 8 | Natera (NTRA) | +3,620% | 43.6% |
| 9 | FTAI Aviation (FTAI) | +2,607% | 39.1% |
| 10 | Broadcom (AVGO) | +2,543% | 38.7% |
| 11 | Tesla (TSLA) | +2,509% | 38.6% |
| 12 | Fortinet (FTNT) | +2,319% | 37.5% |
| 13 | Quanta Services (PWR) | +2,240% | 37.1% |
| 14 | Lumentum (LITE) | +2,225% | 37.0% |
| 15 | Marvell Technology (MRVL) | +2,032% | 35.8% |
| 16 | Teradyne (TER) | +1,855% | 34.6% |
| 17 | Applied Materials (AMAT) | +1,786% | 34.1% |
| 18 | Monolithic Power Systems (MPWR) | +1,708% | 33.6% |
| 19 | Super Micro Computer (SMCI) | +1,655% | 33.2% |
| 20 | Eli Lilly (LLY) | +1,584% | 32.6% |
| — | S&P 500 (SPY) | +310.7% | 15.2% |
None of these were smooth rides. Measured at month-ends, Nvidia’s worst peak-to-trough fall in the period was 62.8%, Tesla’s 67.7%, against 23.9% for SPY. Holding a 10-year winner meant sitting through drops that many investors sell into. For the equal-weight Magnificent 7 as a basket, see the Magnificent 7 backtest.
Why do so few stocks beat the index?
Because stock returns are skewed: a few enormous winners pull the average far above the typical stock. A cap-weighted index owns every winner automatically, and its weight in each one grows as the stock rises. A stock picker has to find those few names in advance and hold them through deep drawdowns.
The pattern holds over the very long run. In “Do stocks outperform Treasury bills?” (Journal of Financial Economics, 2018), Hendrik Bessembinder found that four out of every seven US common stocks since 1926 had lifetime buy-and-hold returns below one-month Treasury bills, and that the best-performing 4% of listed companies explain the net wealth creation of the entire US stock market from 1926 to 2016. The 10-year numbers above are a smaller, more recent view of the same skew.
This also explains why most fund managers trail the index: S&P Dow Jones Indices’ SPIVA scorecard found that 79% of active large-cap US funds trailed the S&P 500 in 2025. More in why most investors can’t beat the S&P 500.
How many stocks beat the S&P 500 on a risk‑adjusted basis?
Even fewer. Over the 5 years to Sep 30, 2026, only 94 of 468 large US stocks (20%) had a higher Sharpe ratio than the S&P 500, compared with 182 (39%) that beat it on raw return. Many stocks that beat the index did so with far more volatility. Measured as return per unit of risk, the diversified index was harder to beat than its headline return suggests. How to run that comparison on a whole portfolio is in how to measure risk‑adjusted outperformance.
Method and caveats
Universe: the 500 largest US-listed stocks by market capitalization today, from Exent’s market database. Stocks without a full history for a period are left out of that period, which is why the 10-year count is 422.
Returns: total return from month-end adjusted closes (dividends reinvested), for windows ending Sep 30, 2026. “Beat” means a higher total return than SPY over the same window. The Sharpe comparison uses monthly returns over 5 years.
- Survivorship bias: the list is today’s largest companies. Stocks that shrank, were acquired or went bankrupt are missing, so the true share of stocks that beat the index over 10 years was almost certainly lower than 36%.
- One window: results end on Sep 30, 2026. A different end date, especially around a crash or a semiconductor boom, would change the ranking.
- Large caps only: small and mid-cap stocks are not in the study.
- No costs or taxes: real investors pay both, which lowers the share further.
What does this mean for my portfolio?
It means the odds are against any single pick, and a portfolio of 10 or 15 stocks will usually miss most of the rare big winners. That is why many investors hold an index core and treat individual stocks as a smaller satellite; see stocks vs index funds. It also means the useful question is not only “did my stocks beat the index?” but “did they earn enough for the risk they added?”
A practical check is to compare each holding with the index on return, Sharpe ratio and worst drawdown over the same period, and to flag positions that added risk without adding return. No data set can say which stocks will win the next decade. The goal is to measure what you own correctly. See the beat the market guide for the wider evidence.
How to measure your own stocks with Exent
- Protect: upload a screenshot of your holdings (no brokerage login) and Exent shows concentration, correlation clusters and crash replays.
- Grow: the holdings scorecard and Sharpe, Sortino and drawdown figures show which positions added risk without return; the efficient frontier and what‑if simulator test a different mix.
- Find: Gems, stocks where several of the best‑rated analysts agree, are our hunt for the next big winners; past accuracy, not a prediction.
Frequently asked questions
In Exent’s data to Sep 30, 2026, between 36% and 39% of today’s 500 largest US stocks beat the S&P 500 over 1, 3, 5 and 10 years. Because the list excludes companies that shrank or disappeared, the true share is likely lower.
Yes. About 64% of large US stocks trailed the index over the 10 years to Sep 30, 2026, and the median stock returned 239.2% against 310.7% for the S&P 500. Long-run research by Hendrik Bessembinder found most US stocks since 1926 even trailed Treasury bills over their lifetimes.
Among today’s 500 largest US stocks, Nvidia had the highest 10-year total return to Sep 30, 2026, at about 13,575%, followed by AMD and Micron. Past results over one window do not predict future returns.
Returns are concentrated in a few huge winners, and a cap-weighted index owns all of them with growing weights. A stock picker must find those few in advance, hold them through deep drops and pay costs the index does not.
The data says the odds are against any single pick beating the index, and fewer still beat it per unit of risk. Investors who pick stocks often limit them to a part of the portfolio and measure the result against a fair benchmark after fees.
See what your portfolio is really made of.
Upload a screenshot of your holdings and get concentration, overlap, crash exposure and a risk-matched benchmark in about a minute.
Check my portfolioLimited offer$1.95 for unlimited checks· unlimited checks
Educational content, not investment advice. Examples are illustrative; past performance does not guarantee future results.