Investment advisers hoping for a return of a “stock-pickers market” should be careful what they wish for. I’m referring to the age-old distinction between an investment environment in which most stocks march to the beats of their own individual drummers (a so-called “market of stocks”) and its opposite, an environment in which most stocks rise and fall in tandem with each other (a so-called “stock market”).

In a “stock market” the best strategy is simply investing in a broad stock-market index fund, while in a “market of stocks” the strategy most likely to beat the market is picking and choosing individual stocks.

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There have been a rash of declarations that we have entered a market-of-stocks environment. Bloomberg even declared that “for stock pickers, now might be the time to get greedy.” But what many analysts don’t appreciate is that the distinction between these two market environments is correlated with the market’s cycle. Stock picking is far more likely to be successful when the overall market is falling than when it’s rising. To hope for a “market of stocks” is functionally equivalent in many ways to hoping for a bear market.

This functional equivalence is illustrated in the accompanying chart. Each dot represents one of the calendar years since 1981; its place on the vertical axis represents the percentage of investment newsletter portfolios that beat the Wilshire 5000 Total Market Index XX:W5000FLT in that calendar year (as measured by the portfolios tracked by my performance auditing firm). Each dot’s place along the horizontal axis reflects the Wilshire 5000’s return in that year.

Notice the steep downwardly sloping trendline that best fits these dots, the statistical significance of which is quite high (as signified by its impressive r-squared). That means, on average, more portfolios beat the market when the stock market is falling — and vice versa. The implication: If it’s really time for stock pickers to get greedy, then the market as a whole is likely to fall.

Last year is a good case in point. The broad market, as measured by the Wilshire 5000’s total return, gained 17.1% in 2025 — well-above the U.S. stock market’s long-term average rate of return. Sure enough, stock pickers struggled: Just 31% of monitored investment newsletter portfolios beat the market, in fact. A similarly low proportion of actively-managed equity funds and ETFs beat the market, according to Morningstar’s Active/Passive Barometer — just 38%.

Of course, none of this discussion sheds any light on whether there actually will be a bear market in 2026, and therefore whether or not the odds favor stock picking. But unless you have an unusually good crystal ball about when the next bear market will begin, there’s no reason to change your investment strategy for making money in the stock market.

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at

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