5 Best Performing Stocks And What To Buy Now

It was a year when expensive stocks grew even more costly and investors could see the true benefit of diversified income producing assets.

Why Did The Stock Market Perform Well

The ability to work from home resulted in many jobs being saved. The usage of technology to solve the current crisis also resulted in earnings getting pulled forward several years.

Best Performing Stocks Based On Lifetime Wealth Creation

According to the SSRN paper “Do Stocks Outperform Treasury Bills?” authored by Bessembinder, ExxonMobil (Ticker: XOM) created a staggering amount of $1 trillion in wealth between 1926 and 2016.

Best Stocks To Buy Now

It might be tempting to look at the list of best performing stocks to extrapolate that their performance would continue.

While we may not agree with everything he says, there are nine decades of wisdom buried in Warren Buffett’s quotes.

However, past performance is not indicative of future performance. Picking individual stocks is hard, even if they have been the most successful stocks in the past.

If you wonder how to reconcile this underperformance with the data that stocks outperform treasuries, the answer lies in a tiny subset of stocks.

Advantage Of Index funds

A better alternative to looking for the needle in the haystack is to buy the entire haystack. No one would have anticipated the company would survive or even reach the current valuation levels looking back at Tesla.

I understand why looking at the stock indices at an all-time high might make you nervous. However, sitting in cash is not a winning strategy.

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