Many news reports and CNBC-type market analysis focus on the short-term performance of individual stocks. But that doesn’t necessarily give financial advisors a full picture of how clients’ stock portfolios will perform over the long term, the typical time frame for most wealthy clients.
That’s why Morningstar recently 15 of the most wealth-creating stocks and 15 stocks that are destroying wealth in the past ten years.
(A few months ago, Morningstar Inc. ranked No. 1 15 Create wealth and funds that destroy wealth, Wealth Management Network highlight.
The list of top wealth creators includes some of the more obvious names, including Apple, Google, Microsoft, Amazon and Tesla.
Here, we highlight the most wealth-destroying stocks, which can serve as a warning to advisors investing client assets in individual securities. Over the past 10 years, these 15 stocks have collectively lost approximately $281.2 billion in shareholder wealth. Morningstar portfolio strategist Amy C. Arnott noted that some of the names are large-cap stocks that once dominated their industries, such as General Electric Aerospace, the legal successor to General Electric.
“While the remaining companies span a wide variety of industries, sectors and underlying issues, many of them have one thing in common: a lack of economic moat or sustainable competitive advantage,” Arnott wrote. “The ten on the list The company has no economic moat, and the other three companies have very narrow economic moats.”
Arnott measured the wealth loss by finding companies with the largest declines in market capitalization and then adding back the total value of dividends paid and stock splits.
