What Percent of Retail Investors Beat the S＆P 500?

Intro

What percent of retail investors beat the S&P 500? If you mean “beat it consistently, after costs,” the number is smaller than most people think. A lot of retail investors are not even trying to beat the index because they hold index funds or diversified funds that roughly track it. The group that tries hardest to outperform is active stock-pickers and traders, and the evidence there is pretty blunt: the average investor tends to lag, and only a minority shows persistent market-beating skill.

For comparison, see how members of Congress perform against the S&P 500 – their results offer an interesting benchmark against retail investor outcomes.

Tables + Analysis

Table 1: A realistic range by “type” of retail investor

Note: ranges reflect published findings on investor skill persistence and trading underperformance. Where exact “percent beating S&P 500” is not directly reported, the table uses the closest defensible proxy and labels it clearly.

Decision takeaway: before answering the headline question, force the definition: “retail investor” is not one behavior. The percent that beats the S&P 500 is meaningfully higher if you include passive index holders who are not competing with the benchmark, and meaningfully lower if you focus on active traders.

Table 2: The behavior gap in a single year (2024)

Source: DALBAR QAIB press release on 2024 outcomes.

What it means: even when the market is strong, the average investor often captures less of it because of timing and behavior, not because they picked “bad” stocks every time. This table does not tell you the exact percent who beat the S&P 500, but it tells you the distribution is skewed enough that the “average” lags by a lot in that year.

Table 3: Brokerage account evidence (active trading vs market return)

Source: Barber and Odean results summary describing returns for households at a large discount broker (1991–1996).

Decision takeaway: the more you trade, the more the math turns against you. Even if some investors beat the S&P 500, the odds drop fast when turnover and costs rise.

Table 4: So who actually beats the market consistently?

Source: Coval, Hirshleifer, Shumway (2021) summary and listings.

How to use it: if you want a clean, defensible number for “consistent outperformance,” the best evidence points to something like “a top-decile minority,” not “most retail investors.”

Conclusion / Callout

If you want the most honest answer to what percent of retail investors beat the S&P 500, it depends on who you include. Passive index investors mostly match the benchmark. Active stock-pickers and heavy traders, on average, lag it. The strongest research-based takeaway is that persistent market-beating performance looks concentrated in something like the top decile, not the majority.

Want to see how this compares to professional and institutional traders? Check out our analysis of top congressional stock traders to see how elected officials stack up against retail investors and the broader market.