- Wall Street Finds Profits by Reducing Mortgages
- This Season: Everybody's A Scrooge
- Warren Buffett, Bill Gates 'Walk & Talk' At Columbia
- Senate Democrats at Odds Over Health Care Bill
- What if a Recovery Is All in Your Head?
- Thanksgiving Week Stuffed With Economic News
- A Taxpayer's Must Read: The Fed Waltz With AIG
- 10 Tips to Get Out of Debt
- Investors to Goldman: Be Less Greedy
- U.S. Stocks Slip, Dollar Rises
- How Stock Investors Can Play Holiday Travel
- Time Lapse World Series Is A Great Play
- Hirschhorn: Greed...or Fear
- My Top 10 Tech Toys for the Holidays
- iPhone a Better Gaming Platform Than Android?
- May Day For Dendreon
- 100% Mortgage Financing From USDA
- Holiday Tipping: Who And How Much
Text Size 
CNBC Assistant Web Producer
If the last five years are anything to go by, then a strategy of picking individual stocks beats just buying the major indexes – provided you pick the winning stocks, research from financial Web site the Motley Fool showed.
 |
CNBC.com Stocks up |
The FTSE-100 [GB;FTSE Loading... ()] has risen just 13 percent over the last five years, an average return of around 2.5 percent per year, the research showed. But the top performing stock in the index, Autonomy, [AU-LN Loading... ()] has risen more than 900 percent over the same period.
"Allocating, say, a small portion of a share portfolio to just one or two of the companies that have outperformed the index … would have delivered better returns than investing in the index alone," the Motley Fool said in a statement.
Looking back on the main gainers of recent years, some of the returns seem very tempting. The ten top-performing shares in the FTSE have risen over 400 percent in the five year period, the report said.
Usually, people prefer to invest in an index as putting all one's capital in a few stocks is risky because the chance of picking out a loser is as high as that of picking a winner.
Here are some of the top stocks highlighted in the report: Tullow Oil [TLW-LN Loading... ()] up 765 percent; Randgold Resources [GOLD-LN Loading... ()] up 694 percent; Vedanta Resources [VED-LN Loading... ()] up 539 percent; Antofagasta [ANTO-LN Loading... ()] up 285 percent.
Aside from the basic resource sector, which has clearly done well over the last five years, insurance group Admiral [ADM-LN Loading... ()] also performed well and rose 260 percent.
The financial crisis has a lot to do with the weak performance of stock indexes over recent years. The historical average is around 11 percent per year, but the slump in 2008 helped knock the average return over the last five years down to 2.5 percent per year for the FTSE.
- Technology can make or break a fortune in the world of alternative energy.
- Warren Buffett and Bill Gates discusses the economy and other subjects with CNBC's Becky Quick.
- Many people are facing the holidays with substantially smaller incomes. Here’s how some are adapting.
- Jim Cramer is a proponent of stocks that pay healthy dividends, and here are his top five dividend plays.
- The homebuyer's tax credit jacked sales for a while, but 2010 is looking weak. Now what?
- CNBC’s technology reporter Jim Goldman guides you through the best gadgets to buy this holiday season.
Data is a real-time snapshot *Data is delayed at least 15 minutes