• Strong performance among a few stocks accounts for much of the market’s return each year.

• There is no evidence that managers can identify these stocks in advance—and attempting to pick them may result in missed opportunity.

• Investors should diversify broadly and stay fully invested to capture expected returns.

9.6%

6.2%

-0.7%

All US Stocks Excluding the Top 10% of Performers

Each Year

Excluding the Top 25%of Performers

Each Year

Compound Average Annual Returns: 1926–2011

In USD. Results based on the CRSP 1-10 Index. CRSP data provided by the Center for Research in Security Prices, University of Chicago.S1397.5

Missing Opportunity