Best investments of the last 100 years: almost all are technology companies

When you look at the stock market over the last 100 years, what you see is that a tiny group of publicly traded companies accounted for almost all of investors’ profits for the entire century.

Most of the top performers come from technology companies, led by Apple (), Nvidia () and Microsoft (). What draws attention is that both Tesla and, albeit briefly, SpaceX (), two of Elon Musk’s companies, managed to enter this list of extraordinary performances.

While these elite stocks delivered spectacular returns, more than 96% of the stock market They did virtually nothing for investors over long periods of time. This vast majority of stocks were unable to even match the average return of 3,3% of one-month US Treasury bonds — basically, the yield that would be possible to obtain month after month over these 100 years, without assuming relevant risk.

These conclusions come from the most recent update of a long-running study of Hendrik Bessembindera finance professor at Arizona State University, who has assembled an essential and thought-provoking set of data on stock investing. The study seeks to identify the major generators of long-term wealth since 1926, the point at which the data used by Bessembinder begins. The rise of technology giants, and the relative decline of all other market sectors, has radically changed the ranking in the last decade — and also in shorter periods.

For example, Tesla did not appear on the list of top wealth generators nine years ago, when an earlier version of the study was closed. Now, the company occupies the ninth position among all publicly traded companies throughout the century. Even more impressive: when Bessembinder redid the calculations at my request in June 16a few days after , the company entered the list of 30 greatest of all timealthough the fall in its shares since then has removed it from that select group.

“We’ve seen very high returns from extraordinarily large companies in recent years, and SpaceX’s early days as a public company were a case study of that,” he said. “For me, the most impressive thing about the last nine years is that not only is wealth creation highly concentrated in a few companies, but this trend has been accelerating.”

The implications

In 2017, I wrote about the first version of Bessembinder’s work on investing. The study already showed that the obstacles for investors picking individual stocks were formidable. Most companies’ stocks didn’t outperform even basic U.S. Treasury bonds. A small portion of big winners supported the entire market, but knowing in advance which winners would be was extremely difficult.

Therefore, I concluded that for the vast majority of investors, it was much less risky to avoid individual stock picking altogether and instead invest through low-cost, diversified funds, especially index funds that replicate the market as a whole.

But Bessembinder’s conclusions also made it clear that there were immense fortunes to be made by anyone who was skilled—or lucky—enough to make the right choices: If you selected the best performers and avoided most of the losers, you would do extraordinarily well.

Both of these insights remain true today, perhaps even more so than before. I still think most people will be better off buying a small portion of the entire stock market, a practice I continue to follow myself. But the potential for enormous wealth continues to attract millions of investors, who rush to buy “hot” stocks like SpaceX. You will have to decide what makes the most sense for you.

Defining the Terms

In the first study, the Exxon Mobil was the performance leader between 1926 and 2016, followed by Apple, Microsoft, General Electric, IBM, Altria Group, Johnson & Johnson, General Motors and Walmart. That list portrayed a diverse mosaic of the economy, dominated by legacy companies, with the exception of two newcomers, Apple and Microsoft, which IPOed in the 1980s.

Now, Bessembinder has 100 years of datawith returns from 1926 until December.

Just to put the SpaceX IPO into perspective, he updated the returns by applying the same methodology used for every publicly traded stock tracked over the last century. Its approach takes dividends and acquisitions into account, and the comparison to Treasury bonds includes adjustment for inflation.

“Lifelong wealth creation“, as Bessembinder defines it, is linked not only to the performance of the stock, but also to the total market value of the company. This means that a 10% increase in the stock price of a giant has a much greater effect on total wealth creation than a 10% increase in a small company.

This is important because technology companies have become giants, including SpaceX, which has only been listed since June 12but it already has a market value greater than $2 trillion. When technology stocks make big moves, the market’s 100-year returns need to be realigned.

A whole century

The economy has changed in the nine years since the first study. More than ever, the group of leaders is dominated by technology stocks, with just two traditional companies — Exxon Mobil e Walmart — remaining among the top 10 of the entire century.

Here are the leaders between 1926 and December, including their lifetime wealth creation and the percentage of US$91 trillion of total wealth generated in the stock market for which each was responsible:

Picking these stocks — and only these stocks — at the beginning of your trajectory and holding them forever would have been a brilliant strategy. But in addition to requiring an extraordinary capacity for anticipation, staying with the winners would also require cold blood, because even the biggest stocks in the market have periodically experienced sharp declines.

While the vast majority of companies didn’t perform enough to justify so much anxiety, a relatively small group made up for everything else, starting with Apple. Founded in 1976, the company went public in 1980 and, alone, accounted for 5,5% of all net wealth generated for investors across the stock market since 1926.

Perhaps even more surprising was the performance of Nvidia, a maker of advanced chips for artificial intelligence. The company didn’t even exist as a public company until January 1999. Yet it has performed so strongly since then that it now appears just behind Apple in the 100-year rankings, accounting for 5% of investors’ net profits over the last century.

Concentration

The stock market has changed over the past nine years in ways that, in my view, make the overall implications of the original study even stronger.

Consider that in the new 100-year version of the study, only the first two companies, Apple and Nvidia, accounted for 10% of wealth creation by December. In the period from 1926 to 2016, it was necessary five companies to reach 10% of total shareholder wealth.

The significant differences over the past nine years also appear in other ways. Taken together, the net wealth creation of the top 10 stocks on the new list amounts to 29% of the total for the entire century. In the previous study, the 10 largest represented only 17,1% of total wealth.

What explains all these changes is the explosive growth of technology stocks.

I have already highlighted the risks of this concentration of wealth in the markets. Diversifying investments is more important than ever, but achieving true diversification has become more difficult now that artificial intelligence and semiconductors have come to dominate many markets globally.

The rise of SpaceX reinforces this point. The company is so big and so highly valued that making a significant individual bet on it is risky. History now tells us that the enormous wealth generated by such stocks in the technology sector also carries risk on an equally grand scale.

c.2026 The New York Times Company