Explore real S&P 500 data and see why index investing is often the smartest choice.
By Carter Tran, April Huang, and Cheryl Xiang
Imagine you had perfect foresight. You invest in NVIDIA in -- and hold through -- — your money grows by more than --. It's a dream outcome — and it really happened.
"Wouldn't it be great to pick the next NVIDIA?"
📊 Interactive Chart Available on Desktop: The full interactive chart showing NVIDIA vs S&P 500 performance with key market events is available when viewing on a larger screen.
But here's the catch: most stocks don't beat the market. In fact, our data shows that the majority of S&P 500 stocks underperform the S&P 500 index on an annualized basis.
"The few big winners carry the whole index."
📊 Interactive Histogram Available on Desktop: A detailed histogram showing the distribution of stock returns vs the S&P 500 is available when viewing on a larger screen.
The market is a complex ecosystem — made up of diverse sectors and thousands of companies. Some thrive. Most don't.
"Understanding the forest, not just the trees."
📊 Interactive Market Structure Available on Desktop: An interactive treemap showing S&P 500 companies organized by sector and industry is available when viewing on a larger screen.
Even within the same sector, individual stocks can have wildly different outcomes. Technology stocks like NVIDIA soared while Intel struggled. This unpredictability is why diversification through index funds is so powerful — you capture the winners without having to predict which ones they'll be.
Think you can beat the odds? Pick any stock and see how it would've performed from the available data period.
"Would you bet your retirement on one guess?"
Even with the data staring us in the face, many investors still try to pick the next big winner. Why? Behavioral finance reveals the hidden biases that lead us astray.
We feel the pain of losses twice as strongly as the joy of gains. This leads to overly conservative behavior after losses — or holding losers too long, hoping they'll rebound.
Which would you prefer?
Reality Check: Most people say they want growth, but feel losses more deeply in practice. The volatile portfolio's dips would cause many investors to panic and sell at the worst times.
Most investors believe they're above average. But in investing, confidence without accuracy is costly.
Test your investing knowledge
"Of course that stock was going to win — the trend was so obvious!" But was it really predictable, or are you just seeing patterns after the fact?
Based on 2010-2018 performance, select up to 3 stocks you think will outperform the S&P 500 going forward
"Your brain isn't wired for investing. That's why index funds work."
Explore More BiasesYou don't need to predict the future. You just need to own it. Index funds don't rely on luck. They own the entire market, capturing every NVIDIA and weathering every disappointment.
"Consistent. Diversified. Low-cost. That's the index advantage."
Consistent returns, low fees, automatic diversification
High risk, requires expertise, most fail to beat the market
This is not investment advice. Always consult with a financial advisor.