What happens when investors largely ignore their stock holdings over intervals of one, five and ten years? In his June 2026 paper entitled "Returns to 'Do-Nothing' Portfolios", Hendrik Bessembinder studies returns to “do-nothing” portfolios constructed from the stocks that comprise the S&P 500 index as of the end of each year since 1970. Do-nothing means buying the stocks at the end of a year and holding them for 1, 5 or 10 years. The only trades during the holding interval are reinvestment of dividends in the same stock and rolling of proceeds from delisted stocks into U.S. Treasury bills. He performs four tests, comparing performances of:
- Initial equal-weighted to initial market capitalization-weighted (value-weighted) do-nothing portfolios of all S&P 500 stocks.
- These do-nothing portfolios to that of the S&P 500 Index.
- Do-nothing value-weighted portfolios of the 100, 50, 10 or 1 largest S&P 500 stock to that comprised of all index stocks.
- Do-nothing value-weighted portfolios of 100, 50, 25, 5 or 1 randomly selected stock to that of the S&P 500 Index.
He ignores trading frictions and taxes. Using total returns and delisting events for the contemporaneous S&P 500 stocks from the end of 1970 through the end of 2025 (55 years), he finds that:
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