Buy-and-Hold Is Losing Its Edge as Fewer Stocks Beat the S&P 500

The share of stocks beating the S&P 500 over the long term is shrinking, and Adam Parker, founder of Trivariate Research, argues that Wall Street's most sacred strategy — buy winning stocks and hold them forever — may have reached its expiration date.

For decades, the buy-and-hold approach has functioned as the closest thing equities investing has to a golden rule. Parker's counterargument, laid out in a MarketWatch Market Extra column by Joseph Adinolfi published on Sept. 24, 2026, targets the assumption at the heart of that doctrine: that a portfolio of yesterday's winners will keep compounding into tomorrow.

The mechanism behind the shift, according to Parker, lies in the explosive growth of short-dated options and leveraged ETFs. These instruments have supercharged the gap between market winners and losers, concentrating performance in a narrower group of names and pulling more of the index's return into fewer stocks.

The consequence is structural rather than cyclical. When fewer constituents outperform the S&P 500 over long horizons, a passive bet on past champions carries a rising probability of holding tomorrow's laggards. The MarketWatch analysis frames this as an increasing need for active managers to be nimble — to rotate, reassess and exit positions rather than anchor to a holding period measured in decades.

The piece lands at a moment when market leadership is already unusually narrow, with heavily weighted names such as Nvidia (NVDA) doing much of the work for the benchmark index. In that environment, the question of whether yesterday's momentum leaders can carry a long-horizon portfolio is no longer academic.

For allocators, the so-what is direct: if Parker is right that derivatives-driven amplification keeps compressing the population of long-term outperformers, the burden of stock selection shifts back toward active management — and the cost of clinging to legacy winners, measured in forgone returns, keeps rising.