Well your assumption that a stock has to outperform a specific market index to be consider worthy is not true. S&P500 is just an index of 500 capital sorted han

Well your assumption that a stock has to outperform a specific market index to be consider worthy is not true. S&P500 is just an index of 500 capital sorted hand picked companies. You made some flawed assumptions: [1] All companies in the index pay dividends. [2] MSFT is not one of the companies in the index. [3] There is only one industry in the index or all industries in the index are somehow complementary (ie. a loss/gain in one will see a similar loss/gain in another) [4] Most industry are related to Technology (Only 62 out of the 500 companies are in the Technology sector) Using your example, if the Technology industry outperforms all other industry within a given period, Person A would enjoy a profit whereas Person B might walk away with a loss. Market indices shouldn't be used as the benchmark for the true reflection of a company's performance/worth. Lockheed Martin is the key example, its one of the most desired stocks that has been growing steadily and pays one of the highest dividends, yet it underperforms the market.