96% of Stocks Underperform 1-Month T-Bills

Researchers from Arizona State University reveal something Wall Street doesn't want you to know: Most stocks don't just underperform—they don't even beat 1-month T-bills. Here a few more truths about investing:

  • The average rate on the 1-month T-bill is 4.05%.
  • The average return on 96% of all listed stocks since 1925 is barely 4.0%.
  • The top 4% of companies account for all of the net wealth created since 1926 .
  • The average retail investor earns about 6.5% per year in the stock market.
  • The stock market (S&P 500) has an average total return of 10% per year.

Hi, I'm Erik. I'm a lifelong student of market history, and the former head of equity trading at Northern Trust.

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The Uncomfortable Truth About Investing

The researchers at Arizona State University analyzed decades of stock market data and found something shocking: The average individual stock underperforms Treasury Bills over its lifetime.

Let that sink in for a minute.

Most stocks don't just lag the market. They barely keep up with inflation.
Why? Because the vast majority of companies eventually:

     Go bankrupt
     Get delisted
     Fade into obscurity

The S&P 500 only looks good because it continuously removes the losers and replaces them with winners.
But if you're picking individual stocks? You're far more likely to own the 96% that fail than the 4% that succeed.

This Is Why 'Buy and Hold' Doesn't Work for Most Investors.

The index wins because it automatically removes the failures.

But you? You don't get that luxury.

When you pick stocks, you're betting you can:

  1. Identify the 4% of winners ahead of time
  2. Avoid the 96% of eventual losers
  3. Know when to sell before companies decline

And here's the brutal reality: Most investors can't do this consistently.

That's why the average investor underperforms the market by 4-5% annually, according to DALBAR studies.

It's not that people are dumb. It's that they're holding the wrong stocks at the wrong times.

The Solution: Know When to Get Out

(Before the Decline).

You don't need to pick the perfect stocks. You need to know when to exit before bear markets and recessions destroy your portfolio.

That's what my Bear Market and Recession Models do. They track 19 leading indicators that tell you when to:

  • Get defensive (before the 96% start failing)
  • Get aggressive (when the risk is actually low)
  • Avoid the mistakes that destroy wealth

Because here's the truth: Avoiding the big losses matters more than picking the big winners.

The ASU study backs this up. Most stocks fail. Most investors hold too long.

My models help you avoid both mistakes.

Get My Free Report: 'A Systematic Approach to Picking Winning Stocks'

What's Inside:

✓ The full ASU study breakdown: Why most stocks underperform T-Bills (and what this means for your portfolio)

✓ The survivorship bias trap: How the S&P 500 hides its losers (and why buy-and-hold is riskier than you think)

✓ My Bear Market Model explained: The 12 indicators I track to avoid the 96% before they collapse

✓ Current market readings: Where we are right now (and whether you should be worried)

✓ The corporate earnings growth and P/E picture for 2026.

I respect your privacy. I will never divulge your personal information to anyone. 

Join 900+ investors who use my models to avoid bear markets and position for recessions before they happen.

You can't avoid the 96% without a systematic approach.

The ASU study makes it clear: Most stocks eventually fail.

But the 4% that succeed? They generate ALL the market's returns.

Your job as an investor isn't just avoiding the losers. It's identifying the winners early and knowing when to exit before conditions change.

That takes more than research. It takes:

  •    A proven system for identifying market cycles 
  •    Experience navigating multiple bear markets  
  •    The discipline to act on data instead of emotions

That's where I come in.

I've been using my bear market and recession models to help investors for 17 years. My track record speaks for itself:

  •  I called the 2022 bear market 2 months early and saved my clients a bundle.
  •  My model portfolios have outperformed the S&P 500 by 3.8% annually for 17 years.

Get the free report and see how having an experienced coach—someone who's been through multiple cycles and understands the long arc of market history—can help you navigate what's ahead.

Get the Report Now (It's Free)

Copyright - ZenInvestor NFP

Insights. Not advice. Always do your due diligence before making any investment decisions.