laokorkor
Senior Member
- Joined
- Jul 14, 2022
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You observation that while EM as a whole is outperforming, only a minority companies are stellar and the majority are awful is a pretty common phenomenon in the stockmarkets. Your chart fully revealed your claim.The stats are beginning to show, it's just semicon that's outperforming.
According to Bessembinder 4% rule, since 1926 in US, the entire net wealth generated by the US stock market was created by just the top 4% of best-performing companies.
Thus, many investment experts advise against stock picking and instead make use of collective instruments such as ETF that emphasize diversification to capture total market returns.
By stock picking, there's a probability that you choose 10 individual stocks and all don't fall under the 4% exceptional stocks.