Do you think you know everything about the stock market and investing? Today, we’re sharing 10 eye-opening statistics that are sure to spark your curiosity and make you see investing in a whole new light!
1. Only 10% of Day Traders Are Profitable
According to research by the University of California, only about 10% of active day traders consistently make money, while the majority lose money over time due to transaction costs and poor decision-making. Keep this stat in mind next time you want to sign up for the last “trading course” online!
2. Long-Term Investors Earn More
The S&P 500 has delivered an average annual return of around 10% since its inception in 1926, but individual investors often earn much less (about 4-6%) due to poor timing and emotional decision-making, as per DALBAR studies. So yes, if you know nothing about investing, you better off by just putting everything in th S&P 500!
3. Timing the Market Is Nearly Impossible
Missing the 10 best days in the market over a 20-year period can cut your total returns in half, according to JPMorgan Asset Management. Think about that for a minute…
4. Millennials Hold Only 2% of U.S. Wealth
Despite being a large demographic, millennials (born 1981-1996) hold a fraction of the wealth compared to older generations, which impacts their participation in the stock market. Yes, some of them invest in crypto instead.
5. Dividends Contribute 40% of Total Returns
Over the long term, dividends account for approximately 40% of the S&P 500’s total returns, making reinvesting dividends a critical strategy for wealth accumulation.
6. Most Stocks Underperform the Market
A study by Hendrik Bessembinder found that only about 4% of all stocks account for 100% of the net gains in the U.S. stock market since 1926. This means 1 out of 25 stocks will be big time winner, so select wisely your porftolio!
7. 70% of Americans Are Not Invested in the Stock Market
A Gallup survey reveals that only about 30% of Americans are actively invested in individual stocks, mutual funds, or ETFs outside of retirement accounts. If you are invested today, you are already ahead of 70% of the population!
8. The Average Holding Period Has Shrunk
The average holding period for stocks on the NYSE was 8 years in the 1960s. Today, it’s less than 6 months (!), reflecting a shift toward short-term trading. It is also much easier today to buy or sell stocks with platforms like Robinhood or IBKR.
9. Women Outperform Men by 1% Annually
Studies by Fidelity and Vanguard show that women investors tend to outperform men by around 1% per year due to more disciplined and less frequent trading. I can only agree with this stat, my wife doesn’t look at her portfolio 20 times a day like I do!
10. The Stock Market Is More Volatile Than It Seems
On average, the S&P 500 experiences a 10% correction every year and a 20% decline (bear market) every 6-7 years, but it still trends upward over the long term. So next time the stock market decline by 10%, don’t panic sell!!
This was “10 statistics you didn’t know about investing”. Did you like it? Tell us!
