Think Twice About Chasing the Biggest Stocks
As companies grow to become some of the largest on the US stock market, their returns can be impressive. But not long after joining the Top 10 largest by market cap, these stocks, on average, have lagged behind the market.
• From 1927 to 2024, the average annualized return for these stocks over the three years prior to joining the Top 10 was more than 25% higher than the market.
• Five years after joining the Top 10, these stocks were, on average, underperforming the market—a stark turnaround from before. The gap was even wider 10 years out.